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LNC-D:
Moody’s affirms LNC ratings. Outlook remains stable.
https://www.moodys.com/research/null-Moodys-Ratings-affirms-Lincolns-ratings-outlook-stable-Rating-Action–PR_1000010215?cid=GAR9PTU7VKT2671&emailToken=eyJ0eXAiOiJKV1QiLCJhbGciOiJIUzI1NiJ9.eyJVc2VySWQiOiJkYzVkYjczMC01NTBiLTQ3ZjctYjhjZi05NzY2ZjAxZmU0MzMiLCJEb2NJZCI6IlBSXzEwMDAwMTAyMTUiLCJjcmVhdGlvbkRhdGUiOiIyMDI0LTA5LTE4VDE1OjEzOjAwLjIyNDI1ODQtMDQ6MDAiLCJleHAiOjE3MjY5NDU5ODAsIlVzZXJOYW1lIjoiY3BhbWlrZW1iYUB5YWhvby5jb20iLCJVc2VyVHlwZSI6IjIifQ.QEmUPxlty5tWqHK3kL9-RLWMCTKw3dv7kL6riy4LQ7M#0572b961dceedc105347b4ba6f05cd6f
PRIF-H has jumped 97 cents today to $25.23. Why??
Wilson – Total volume on day is 100 shares that printed at that price. Most likely someone used a market order and/or if you look at where that security trades, it’s always with a gigantic spread on super thin volume; presently 65 cents on bid vs. ask as a seller just stepped in now at par.
Thanks, theta. Looks like we were both typing replies at the same time.
Never mind. Volume: only 100 shares sold. Bid now much lower. You can guess what happened : )
SPMC preferred incomming
SOUND POINT MERIDIAN CAPITAL, INC.
% Series A Preferred Shares due 20[●]
Liquidation Preference $25 per share
https://www.sec.gov/ix?doc=/Archives/edgar/data/1930147/000182912624006317/soundpointmeridian_n2.htm
SPMC is a June IPO
Received Notice from Fidelity. ETI- is being called 10/15/2024
Isn’t that a fixed rate perpetual/convertible? I hold it with Fidelity and have not received a call notice.
The email notice hit my inbox early AM this morning
Nothing in my inbox at Fidelity. Nothing on SEC.gov. Last filing was yesterday (9/17) and for beneficial ownership filing. Can you post what your email said?
This notification is to inform you that a bond or CD in your portfolio is about to mature. Once it does, you’ll automatically receive cash in your account.
CUSIP 29365T302
Security Description ENTERGY TEXAS INC PFD A
Interest Rate
Maturity Date
Quantity (Quantity equals the number of bonds. One bond equals $1000 in face value) View Online
Price “10.00”
Principal View Online
Call Type MATURITY
Call Date 10/15/2024
Thanks Legend, that clears up the confusion. Too early this morning, ETI- definitely isn’t ET- – LOL.
That’s the right CUSIP for it – it matches what QOL has.
But Fido’s notice does have some funny data points.
It’s a $25 liquidation preference, perpetual preferred stock, but Fido’s notice says:
1. Price = $10.00.
2. Call type = MATURITY.
3. The “Quantity” line refers to this as a bond.
I cannot find the SEC filling at Entergy website (yet). However, Fidelity provides under Research tab for ETi – the following link:
http://archive.fast-edgar.com/20240815/AF2ZL22EZ22RT2Z2222Q22YPI4G8ZZ22DS62
Its the first items under “News”
Cannot find any confirmation of this ETI- event. Some sites say it is “callable” on 10/15/2024, but not that it has been called.
Can anyone provide a link to a definite announcement. Thanks!
I see now. Entergy Texas, not Energy Transfer.
Is this the Entergy Texas, Inc. Pfd A?
If so, dang.
just bought another 500 at 24.85 short term CD to park my money. Collect .15 cents and the next dividend and it keeps my hands off the money for trading.
I thought buying it last year at 23.75 I was pretty safe for a long time as who was going to call a 5.3% preferred? Now I know.
I am in this at an average of $23.34 and I was hoping to hold it for a lot longer than this. A disappointment, but this was part of the risk of things that could happen.
According to Tim’s master list, all of the other Entergy issues are BBs. That aside, ENO looks vulnerable for a call at 5.45%.
Another one gone on 10/20 Pyxis tankers 7.75%
PXSAP called
Not a pfd that most will have heard of but I owned it and sold it too soon.
Pity! With 47m cash in the BS and the preferred having a nominal value of only 10m that was a very safe 7,75% yield.
Started overweight in this one since $13. Good ending. Doesn’t work out for every security that was ever in a distressed situation.
MDRRP had a buyer at 27.49 + for a while on high volume. As a reminder this gets redeemed Feb 2025 but the size of the ask has come down and a big order would be needed to bring it back up
US 10Yr — new 52 week low this morning at 3.636%
NEWTH is trading this morning. Bid $25.25
AL-prA to be redeemed
We intend to issue a notice of redemption for the Series A Preferred Stock on or soon after the pricing of this offering. The redemption date must be no sooner than 30 days and no more than 60 days after the mailing of the notice. We will redeem all 10.0 million shares of the Series A Preferred Stock for cash at a redemption price equal to $25.00 per share (or $250.0 million in the aggregate) plus any declared and unpaid dividends to, but excluding, the redemption date.
https://www.sec.gov/Archives/edgar/data/1487712/000119312524220237/d209085d424b5.htm#supprom209085_5
RC – Ready Capital – after hours on Friday:
Troubled Mortgage REIT Cuts Its Dividend—as We Warned [Barrons]
Ready Capital announced its September quarter dividend distribution would be 25 cents for each common share, down from 30 cents in June.
By
Bill Alpert
Sept. 13, 2024 7:35 pm ET
Ready Capital’s struggling real estate borrowers were making interest payments with IOUs, an analysis in Barron’s this week noted.
Dreamstime
New York-based mortgage lender Ready Capital declared a quarterly dividend after the market close Friday that was 20% below its last dividend payout.
The real estate investment trust announced its September quarter dividend distribution would be 25 cents for each common share, down from 30 cents in June, and 40 cents in June 2023.
“After careful consideration, the board of directors made the strategic decision to better align the dividend with our long-term growth objectives,” said Chief Executive Thomas Capasse. “We remain confident that our earnings will continue to migrate towards historical performance targets.”
An analysis in Barron’s this week noted Ready Capital’s struggling real estate borrowers were making interest payments with IOUs. The REIT’s June quarter earnings release had said it had $37 million in “distributable earnings” for the quarter, using the REIT industry’s favored measure for calculating payouts.
When the quarter’s 10-Q filing appeared, however, it revealed that about $15 million of Ready Capital’s interest income—and distributable earnings—had been paid with IOUs, not cash. Operating cash flow for the quarter was just $1 million. We wondered if that would be enough to fund the $50 million required to pay a 30 cent common dividend.
It wasn’t.
In Friday’s dividend announcement, Capasse said Ready Capital had sold off $338 million in assets—generating $57 million in liquidity. He said its small business lending operation was accelerating.
“These efforts are supported by setting the common dividend at a level that allows for reinvesting cash into new loan originations and additional share repurchases,” Capasse concluded.
I have a slight profit in some shares of RC-B which matures in 2026. Would you take profits now (it’s in an IRA) and reinvest or would you hold? Thanks.
David, no one can answer that for you. Do a quick search. Quantum and Yahoo show the chart for RC it’s common is down almost 20% in the last 1-1/2 months and down for the year.
The common and the preferred and the BB were up at close on Friday and this announcement was after hours.
They sold assets, was it at a loss ? and are redeploying capital in new loans which will be at lower yield or higher risk if a recession develops. Also they are competing for new borrowers along with other lenders.
Do you think with the feds lowering rates will it be enough and in time to offer some relief to their borrowers? If the loans are variable and rates go down they will be collecting less. Why did they sell assets instead of issuing common? difficult market to sell shares in or issue new preferred?
Are you looking at a profit or a loss if you sell?
Current 6.36% yield and close to par now with 22 months to go to collect 6 more dividends and $1.64 to par.
The common dividend has now been cut 3 times in the last 2 yrs. There is still a cushion to protect the BB
If you’re confident it will be called in 2026 are you confident enough to purchase more if the price falls down?
I hope posting these questions helps you think it through. Again no one can say what to do.
Ready Capital weekly chart.
https://www.tradingview.com/x/T6jbDZDV/
Nothing but down since June 2021. ‘Twas a clue.
Short & Sweet Rocks!
But I like to ask myself a whole lot of questions if I get nervous about an investment. The one about buying more is the real kicker for me.
Charles M and Rocks2Stocks,
Thanks for your insight. I would not add more shares if the price drops and the chart answers my question. Rather than continue to fish, I’d rather cut bait and take my small profit.
If that can help you in the decision-making.
in the last 12 months to 06/2024 RC had:
— Return on Invested Capital of < 1% while their cost of capital (WACC) is at 5%
— Total Debt / Assets of 74% and
— Net Debt to Equity of 370%.
In short: they are in poor financial health.
costasco happened across your comments on that other site. Very insightful when you look and comment on risk of different investments. Hope you stick around or drop in occasionally. Know you will add a lot to the conversations here. You made me think and to check FINRA which I normally do.
I can get a secured bond paying 1/2% less than a BB I just bought and 2 years shorter maturity
@Charles M Thank you for the kind words. That other site (SA?) is full of cheerleaders and naive income seekers, so I am glad I found this forum for some sober assessment of risk / reward of investments.
My background is economics, micro and macro, and I have been into investing since 1972.
I am taking a risk right now with RWTN no doubt. Based off the ra ra enthusiasm I see on the www. I’m in their backyard and everywhere I look the economy is doing good with new business opening up in place of ones pushed out by the downturn Covid caused. Older businesses, and older owners who just decided it’s not worth it to build the business back up especially since foot traffic is down with some I have talked to have decided to close up. But newer businesses are starting up and more people are moving into the area although I don’t think as much as the new rental market needs as it was over built. Stores were crowded this weekend showing people are spending.
My concern is if we do have a recession at some point in the Bay area and jobs are lost in greater amounts outside the tech field people put major purchases like a home on hold. This would affect all the high risk MREIT’s.
So I am setting up the pinball and the flapper hoping to play one more game before the power goes out.
I have seen this show too many times and I know the show ends sooner or later and I don’t mind missing the ending just so I can get out of the parking lot before everyone else wants to leave.
RWT did just raise the common divi
seems like an odd thing to do unless you are pretty confident in at least current business trends since for a little while they weren’t even earning the common divi
RWT also hitting 52 week high today
i have small positions in RWT-A, RWTN, RWTO
When people are too generous, that is at least an orange flag to me.
Basically no change this morning ( after a small drop)– whodathunk?
Gary, the average person in the herd is just following the crowd. David at least is watching and asking questions. There were a lot of people in MPW who thought it was a great investment until it wasn’t because they were not looking at the fundamentals or hearing the warning bells.
Right now, I think MREIT’s is a sector with higher risk but it could be profitable short term as rates go lower to be in and to trade.
NSA
Things that make you go hmmmmm…..
What’s up with this? Maybe I am missing something as I don’t follow this one.
NSA-A 6% = $23.39
NSA-B 6% = $21.65
Here’s the prospectus. I haven’t gone through this carefully yet.
https://www.sec.gov/Archives/edgar/data/1618563/000162828024017387/april2024-424b7prospectuss.htm#ia138dd617cb84018a132c8de8371ab2d_25
NSA-A and NSA-B are pari passu with the same 6% coupon, but they have different redemption and optional conversion provisions. NSA-A is redeemable at any time, while NSA-B can’t be redeemed until 9/15/2043. On the other hand, both issues have an optional conversion if there’s a change of control. NSA-A has a share cap of 2.0466 (see page S-28), while NSA-B has a share cap of 1.23732 (see pages S-40, S-41).
Sailor –
NSA-B is much more illiquid than NSA-A and isn’t callable for 20 years. The B shares were created when NSA acquired 15 self storage properties from Personal Mini Storage in March of 2023 for $140M and issued 5.67M shares of new 6% NSA-B shares to pay for it. Personal Mini appears to be a private company with shareholders that owns 45 self storage assets in Florida. The first quarterly dividend on NSA-B wasn’t declared until December 2023.
So my understanding is those preferred B shares were private for a time and held by the shareholders of Personal Mini. Some of those shares were registered and allowed to trade on the NYSE in September of 2023.
According to Schwab, it is only 2.08M of the 5.67M shares outstanding (but Schwab could certainly be wrong). My guess is the private shareholders of Personal Mini still own the rest of them. NSA-B still does not show up as a security on Quantum Online more than a year after its issuance.
NSA-A has 9M shares outstanding which all freely trade. So one would expect that NSA-B will always trade at some discount to its sister preferred, even though both of them have stated interest rates of 6%.
Hope this helps.
thanks – NSA-B is an interesting find… I will take a look, thanks
if I understand this security correctly, basically in the event of a sale as long as the company is sold at roughly $17.5 or above you get your money back on the NSA-B, if they elect the share conversion option, at this entry price of $21.5-$22 (ASSUMING that it is bought by a public company the stock should be liquid as its too big for it not to be)… if stock is way higher (like it is now) I assume they would pay you out in cash at $25.
Papa,
Very helpful information.
Thanks for sharing your detective work.
NWGG, it’s interesting that Quantum doesn’t have a record of NSA-B. Schwab shows 2 million shares outstanding. Price chart on the ‘B’ is weird.
QOL responds to emails from clients. Provide them with supporting documentation and you could see B on QOL – you could start with https://www.sec.gov/ix?doc=/Archives/edgar/data/1618563/000162828023008754/nsa-20230315.htm and see if that’s enough to get it on QOL
HPE convertible
https://finance.yahoo.com/news/hewlett-packard-enterprise-announces-pricing-025900783.html
HEWPP at Fido
PIK eligible coupon – not my cuppa tea.
” HPE may pay declared dividends in cash or, subject to certain limitations, in shares of common stock or in any combination of cash and common stock…”
Ken,
As a convertible its price will be tied to the price of HPE. The 7.625% dividend rate is tempting but it comes with the potential for capital loss if HPE is less than the current $16.4 ish at maturity. Current pref quote is 50.88, conversion ratio 2.53 – 3.1056, using the max 3.105 ratio: 16.4×3.1056=50.88. Could also have a capital gain if it’s above $20 where it briefly went in July. Given their history and the intense competition in that area I’m skipping this one.
I think it has to stay above 50/3.1056 = 16.0999 to prevent capital loss. It’s based on the volume weighted average of the common stock per yahoo. An interesting but I have the same reservations as you all with past performance and the market. They should just announce that they are creating NVIDA rack nodes like Dell.
If you can get it at 50, breakeven is 16.1 as you say but it’s at 50.88 this morning. Busted convertibles are easier to evaluate as they end up acting like a standard preferred , but straight up convertibles are just a play on the underlying stock so I wouldn’t buy it unless it was at a good discount to the underlying.
AJ:
It is worse. This HPE issue is one of those mandatory convertibles that automatically converts into HPE common in 3 years. They try and entice investors/marks with these high yields. The best way to view/evaluate this garbage is in the rear view mirror of a rapidly moving vehicle.
Check out the bath folks took in AQNU or currently in ALB-A for a taste of what the losses can become.
“each share of Preferred Stock will automatically convert into a number of shares of common stock on or around September 1, 2027, into between 2.5352 and 3.1056 shares of common stock of the Company, par value $0.01 per share (“Common Stock”), subject to customary anti-dilution adjustments, determined based on the volume-weighted average price of the Common Stock over the 20 consecutive trading day period beginning on, and including, the 21st scheduled trading day prior to September 1, 2027. “
There is nothing inherently wrong with mandatory converts, you just have to understand that you are really buying the common stock of the issuer. Some issuers work out just fine, some don’t. Look at APOprA, it’s up about 24% since its issuance last August, plus the 6.75% yield. Absolutely DO NOT BUY these if you don’t have great expectations for the common, you are simply buying a variation of common stock with a dividend enhancement. I’m not a fan of HPE so I am passing on this convert. Simply stated, if you like the common it might make sense to do the math on the convert, if you don’t like the common mandatory converts won’t bail you out.
Oh boy the toilet paper trust (TPTA) is at it again. Apparently, bondholders don’t appreciate the slide in ratings at EJ from BBB- to B. I have 22 shares left from trading/flipping average of $21.45.
I have made several of the inflation adjusted steak dinners just trading the price movements.
“NEW YORK , Sept. 6, 2024 /PRNewswire/ — Arena Investors, LP (“Arena”) on behalf of its investors, holders of $5 million in aggregate principal amount of 6.00% notes due 2026 of Terra Property Trust, Inc.(TPTA) (“Terra”) , today sent a letter to the Terra Board of Directors expressing its concerns with the lack of response to questions around the repeated downgrades of the Notes.”
“As referenced in the letter, at the time of the initial offering and Arena’s purchase in June 2021, the Notes were rated BBB- by Egan-Jones Rating Company (“Egan-Jones”). As of May 31, 2024, the Notes are rated B by Egan-Jones. Arena has attempted to engage with Terra for nearly one year, having made multiple requests for additional information on the deterioration in Terra’s performance, all of which went unaddressed by Terra.
As noted in the letter and in response to a lack of engagement by Terra, Arena is considering forming an ad hoc group of noteholders to protect their rights and evaluate further necessary action.”
per FIDO no link provided
Thanks NWGG I have my concerns about commercial REIT’s so I sold out of Terra a long time ago. Both HPP and Terra are in the same boat. There are stronger reits out there to invest in. 2025 is going to be a banner year even with lower rates.
@CM TPTA
With some of these “short side shops” the allegations can be more like an episode of the Jerry Springer show. Those tend to be annoying but, nonetheless still trade-able.
I just dumped some shares at .17c over cost (10 left). Ironically. there was an III’er that contacted the bond trustee I believe and reported TPTA in compliance.
Regardless, hold the feet of management to the fire I say.
Sir Northwest! trying to keep my trades to a small risk bucket. As Theta says, all it takes is one loss to wipe out all your profits on other trades. Just recently I had cold feet on one and sold for a .01 profit!. Good thing we have free trades.
Off to honey do’s
So far ratings drop hasn’t effected TPTA’s price as much as I expected. Down at the beginning of the week then up and now down again. Last time I bought it was around $12 in March. I would be interested if it got close to that again.
imho – Egan Jones ; i think when a company needs a rating , they pay (fly by night) for one ; !
Hump Day Data Dump…
10Yr Treasury — new 52 week low today at 3.65%
2Yr/10Yr Treasury Spread — still positive at 0.02
CME FedWatch — 87% chance of 25bp September rate cut, 13% 50bp cut
CPI — dropped to 2.5%
Core CPI — steady at 3.2%
30Yr Fixed Mortgage — drops to 6.11%
AAA gas prices — drop $3.25ga national average
Hurricane Francine — nearing landfall in Louisianna
Thoughts & Prayers for the 911 families…
Agency available at Schwab today only, first settlement tomorrow.
FFCB 3133ERSH5 5.67% 2044, call 9/12/25
So 1 year of call protection along with 20 years of interest rate risk? Not to mention almost no potential for capital gains?
So what’s your beef?
Asymmetrical risk. It’s kind of a lose-lose proposition.
It’s just good to highlight that if rates fall, these WILL be called. If rates go higher and stay higher, you’ll hold until 2044.
What am I missing here?
That all callable bonds work that way, so why complain about this one?
Well David, there are different types of callable bonds. Some have longer first call dates and shorter maturity dates. Others have lower coupons which increase the potential for capital gains (assuming rates go lower) and also lowers the risk of call. Does that make sense?
Also, it’s not really complaining so much as it is making factual comments. Sorry if you’re taking that wrong and getting offended?
DW – Maybe Rocks2Stocks simply likes 5.67% whether it’s for 1 year or 20 years…
Many of the 3-4% perpetual preferreds sold during the 0% Covid-era Fed were quadruple lose-lose-lose-lose propositions when people were desperate for yield. When Fed rates go up like they did, these low yielding perpetual preferreds got haircuts with massive potential capital losses to the owners (Loss 1). No chance for capital gain at Fed Peak & probably not even after future cuts coming as they were brought to market during 0% Fed rates (Loss 2). Many of these 3-4% perpetuals will never be called (look at Tim’s preferred spreadsheet of 3-4% coupons) as many have been active for 15-20 years without call – so buyers of these preferreds may have a perpetual loan on their hands (Loss 3). Then there’s the potential issue with non-cumulative payments & bankruptcy with many of these less than blue chip companies that have come to market during the 0% Fed rate era vs higher stability in blue chip names & US government federal loans (Loss 4).
In summary, Rocks2Stocks may be a different than you in age or assets & is pleased with 5.67% for 1 or 20 years. I completely understand your argument, but understand, others may have needs, assets, & time horizons different than you & I. Best regards…
Best of luck Newbie. Stay safe out there!
Newbie thanks for the detailed response. Your point on age is a good one. I have been a buyer of a few low coupon preferred. I bought several low enough that I am getting 6 to 6-1/2% and I also bought because they are a area of the market that people are always going to be using the product. In other words utes. I’m happy with the return for the time I may have left in the market and I am not counting on big capital gains. I have a hard time taking the risk to buy. Term preferred or bonds 30 to 40 years out. Not something I might be in the right kind of mental health to be involved in the market that far out.
David – I get the feeling an academic discussion or article about the nuances of a call and what it’s accomplishing for both parties, both the issuer and the buyer, might help you understand what Dick was getting at… if you’re interested I’ll be willing to go look for one to post… most likely there’s a good one at Investopedia… it will give you a better idea of what the consequences are that Dick’s bringing up…. Right now, to generalize, issuers are taking advantage of income buyers by issuing bonds with shorter and shorter first calls because investors are not being adequately compensated for the theoretical risks investors are taking on by accepting shorter calls without getting adequately paid for it… I believe that’s what Dick was trying to point out… I’ve been playing this game to some degree with Agency new issues by being willing to assume that their longer new issues with high coupons and short calls had such a high probability of call that it was worth the risk and the coupon’s were high enough to ease the pain if I turned out to be wrong… But now those coupons are shrinking, passing on more of the risk of being wrong to me… I’ve stopped playing the game on these issues… That’s not to say buying them is wrong – it’s just become too skewed in the issuer’s favor in my mind to continue playing.
2wr
Absolutely agree with your thinking on Calls.
All through 2023 and the first few months of 2024, I also played the GSE game.
Took the higher rate they offered, and planned on the Call date for my bond ladder.
Worked out well, until……
The yield premium fell and the Call period shortened.
Haven’t bought a GSE in the past four months.
Just looked at the option this afternoon because a T had matured.
Bought a lower yield T (T’s have no Call)
Fido also showed in email alert FHLB 5.70% 9/18/2044 and 5.60% 9/26/2044 new isssues… I didn’t look at details but will chase down CUSIP if anyone needs them
Do any put bonds exist? For example, the interest rate is 4% and the buyer has a monthly or annual put? I’m sure you could create that security with derivatives, but I’m not that smart. I think there would be huge demand for a putable long bond -people want protection from ZIRP as well as spiking long term yields at the same time
you mean beside the recently discussed SLMNP or do you really mean only bonds, not inclusive of preferreds?
I would be looking for quality as well as liquidity — something like the inverse of the common agency bonds.
LOS ANGELES–(BUSINESS WIRE)– Hudson Pacific Properties, Inc. (NYSE: HPP) (the “Company”) , a unique provider of end-to-end real estate solutions for tech and media tenants, today announced that its Board of Directors suspended the Company’s quarterly dividend on its common stock, commencing with the third quarter dividend that would have been paid in September 2024.
Chairman and Chief Executive Officer Victor Coleman said, “Studio demand has recovered more slowly than anticipated following the union strikes and negotiations, and we no longer foresee the need for a distribution in relation to taxable income in 2024. Our Board therefore made the decision to suspend our common stock dividend to preserve capital in an ongoing challenging environment.”
In addition, the Board declared a dividend on its 4.750% Series C cumulative preferred stock of $0.296875 per share, equivalent to an annual rate of $1.18750 per share, which will be paid on September 30, 2024 to preferred stockholders of record on September 20, 2024.
https://investors.hudsonpacificproperties.com/investor-resources/press-releases/press-release-details/2024/Hudson-Pacific-Properties-Suspends-Common-Stock-Dividend-and-Declares-Preferred-Stock-Dividend/default.aspx
Thanks J, I completely forgot about this company. Between the property they owned in San Francisco and the properties they had in Southern Calif. catering to the entertainment business I stayed away from this co. as an investment.
https://finance.yahoo.com/news/television-shopping-channel-qvc-floats-143218988.html
Television shopping channel QVC Inc. launched exchange offers for its notes due 2027 and 2028 to push out maturities and take advantage of the debt trading at lower levels…
surprised it is easy to get this or the they can save interest, I assume they might go BK. Refi to me would be at higher rate. I’d not give them money. I had these and sold awhile back with good gain but threat of BK making it make sense. I am sure where I resent the capital did better.
and the next “shoe to drop” will be the div on the Preferred
if I held this one , i’de be out of it in a flash !
$30,000,000
GREAT ELM CAPITAL CORP.
% NOTES DUE 2029 GECCH incoming
https://www.sec.gov/ix?doc=/Archives/edgar/data/1675033/000119312524216009/d683612dn2a.htm
Thanks J, I might be interested in that one.
And GECCM outgoing:
We expect to use the net proceeds of this offering together with cash on hand to redeem all of our outstanding GECCM Notes. The GECCM Notes bear interest at 6.75% per annum and have a stated maturity of January 31, 2025.
Didn’t these guys once have a note or preferred issue pulled from the market due to no interest? Of am I confusing them with somebody else?
Schwab is not listing it yet ; what’s the int rate on it ?
Once again- 2 shares of SLMNP went for $943… something afoot here?
Fat finger x2 in a week- seems unlikely, but possible.
Maybe just rate cut expectations. Doesn’t look like a default is likely to happen.
Have 10 @ $925 for sale but no biters. It must be movement between different accounts within the same broker.
If interest rates fall, SLMNP may climb towards $1000 longer term. At around $848 this was a no brainer buy with that put option as long as LYB does well. I think I will hold as my average is around the put price. Where else can I get 7% with a break even put and possible capital appreciation?
FWIW, I put in a GTC sell for my few units last week, they were picked up Friday @ 940. Don’t get it but not complaining.
US Bank Bonds Today…
JPM
* 48130CRV9, 5.5% Coupon, Senior, A-/A1, Price 100.35
* YTM 5.471% 9/9/44, YTC 5.311 9/10/26.
Citigroup
* 17290AD49, 5.4% Coupon, Senior, A3/BBB+, Price 100.10
* YTM 5.39% 8/30/39, YTC 5.35% 2/28/27
So if rates go lower, these will probably be redeemed in a couple years. If rates go up, you’ll lend them money for 15+ years for below market rates. What a great deal! (sarcasm font)
Just like many preferred stocks…when rates go lower, many preferreds will be redeemed at first call & when rates go higher, count on loaning companies money for below market rates potentially for perpetuity…
No, not just like preferreds. These don’t have the potential for large capital gains, right? That’s kind of a big difference.
MANY of the 3-4% preferreds from the 0% FED COVID era have major capital losses for those that bought back then…I prefer term preferreds & corporate bonds with lower risk, lower reward…BUT with an actual maturity date. Your risk tolerance is different & I respect that DW. Best regards!
Since you mentioned major capital losses due to rising rates…What’s going to happy to a 2044 maturity bond if rates go up?
DW—The same thing that will happen to your perpetual preferred when rates go up, both will take a hit, but I get principal back in 2044 while you may have a perpetual loan without ever recouping principal at par.
Term preferreds won’t go up in price much. Those old perpetuals much below par have room to grow if the stars align. That’s why some of them don’t pay much more than the termies. As a trader I lean toward the higher volatilty perpetuals though I trade both types.
The issue with these is the quick call option for the issuer paired with the long maturity date. Someone buying these is taking all of the same long duration interest rate risk but without any of the possible capital gain upside. It’s a lose-lose investment. Rather than purchasing these lose-lose issues, I’d suggest thinking about just sitting in cash and then you could be liquid in case asset prices fall significantly.
They pay a lot more than cash that’s not a lose. The only real loss is default. Rising interest rates if they happen may be worse than what you paid for but rarely worse than cash if they keep paying.
Fine with me when they are paying higher dividends to retain the option of calling. If you want long term safety accept a lower divvy instead of rolling the dice in exchange for higher payout.
Conifer Holdings (CNFR) just sold its Insurance business and changed its CEO.
They got a publicly traded senior unsecured 9.75% BB (CNFRZ) due 2028 quoted at 22.00. I just bought some on the assumption that after the sale cash balance far exceeds their outstanding debt, so they will be servicing the BB (for some time). NO investment advice, DYODD.
Bloomberg…
* B. Riley confirms talks on asset deals to cope with debt
* Oakmark is near deal to buy majority stake in two B. Riley units
* Big Lots files bankruptcy
They can rebrand as Broke Lots. Their business is buying overstocks cheap and selling cheap. Apparently it’s getting harder for them to buy cheap. Ollie’s still finds a way.
I thought a lot of places like TJ Max and Ollie’s in many cases were just making their own cheap and inferior merchandise in many cases. They just pay to use a brand and slap it on if they want it to look “fancy”. The days of finding a ton of overstock are not as easy as the past with how companies operate.
So using TJ Max as an example they make super cheap shoes and just pay Nike for the brand they slap on it. They are nothing like Nike bought at the Nike Store. The list is endless of these types of situations. From shoes, to shirts, to socks, to home items, etc… That is how these stores are ran now days.
RILYM closed up 18.70% today and closed at $20.88. The chances that RILYM will pay in full have gone up considerably. Management just needs to dot the i’s and cross the t’s on the proposed deals. If they do that in the next few weeks, RILYM should jump up back above $24.
NewtekOne, Inc.
% Fixed Rate Senior Notes due 2029
NEWTH incoming
https://www.sec.gov/Archives/edgar/data/1587987/000158798724000179/prospectussupplementsept20.htm
J any indication they will use the proceeds to call any of the other BB’s ?
“The net proceeds from the offering will be approximately $ , after deducting the discounts and commissions payable to the underwriters and estimated offering expenses payable by us (and assuming the underwriters do not exercise their option to purchase up to an additional $ aggregate principal amount of the Notes). The Company intends to use these proceeds for funding of investments, repayment of existing debt and general corporate purposes. For further information, see “Use of Proceeds” in this prospectus supplement.”
This is in the doc… Unfortunately, I do not have any extra info
Well J 2WR can hope the older BB’s are getting called
I see they continue to skirt the issue of addressing the extra layer of protection theoretically provided to NEWTZ holders alone, not this new issue for example, even though this new issue will be pari-passu. A quick review shows no mention of it in this prospectus whatsoever, yet it would seem as though as long as NEWTZ remains outstanding NEWT cannot issue new debt if it violates the 1940 Act restrictions as it pertains to asset coverage…. The latest 10q does say, “As of December 31 2022, our asset coverage was 169%. Although we are no longer regulated as a BDC, certain covenants in our outstanding 2026 Notes require us to maintain an asset coverage of at least 150% as long as the 2026 Notes are outstanding,” but note they DO NOT AND HAVE NOT UPDATED their asset coverage ratio since 12/31/22. Are they in violation? I do not have the abilities to say. But how can it not be material enough to even be mentioned? Yeah, I know, after all this time I should just let this go, but if NEWT can ignore it by not continuing to update their coverage ratio, then what’s to say the 1940 Act asset coverage ratio is toothless when it comes to protection all BDC noteholders?
2whiteroses, NEWT continues to act like a BDC with borrowing money and using it for investing and funding operations. They are in a growth mode full steam ahead while clouds gather on the horizon with a possible storm brewing of a recession. They are acting more like a BDC than a bank holding company. Do they even have depositors like a normal bank?
https://www.newtekbank.com/ note they’re still offering 5.25% high yield savings
On September 4, 2024, the Board of Directors of Cyclacel Pharmaceuticals, Inc. (the “Company”) passed a resolution to suspend payment of the quarterly cash dividend on the Company’s 6% Convertible Exchangeable Preferred Stock CYCCP (the “Preferred Stock”) scheduled for November 1, 2024. The Board of Directors will continue to evaluate the payment of a quarterly cash dividend on a quarterly basis.
https://www.sec.gov/ix?doc=/Archives/edgar/data/1130166/000110465924097731/tm2423533d1_8k.htm
Just checked their IR site.
Their press release page trumpets their attending the Wainwright conference, but nothing about this, which is in a 1 line SEC filing….
That conference is turning out to be cursed.
One of the other participants fired their CEO a few months ago and just published this morning that they have given up looking for another one. That one is SAVA, and anytime you can’t find a CEO, that is a red flag bigger than the ChiCom’s flying over the forbidden city in Beijing…so this is probably a case where everyone knows the winning lottery ticket number, they just don’t know when it will be drawn.
So if anyone is looking for the potential of astronomical returns, buy a few bucks of very cheap puts every week on that one until you hit the jackpot.
Not investment advice, DYODD….