Below readers can post in the comments section items they believe are important to seen right away by all other readers.
For instance if we are not at our computer and a reader spots a new issue being issued they can post it below where others can come for ‘breaking news’ from other readers.
We want to keep this page ‘fresh’ so we will slick it off every 50 days so the items below remain only newer items.
We only ask that comments beyond the breaking news be kept to other pages or this page will be ‘out of control’ and not fulfilling what I hope is a handy alert page.
TO START A NEW THREAD GO TO THE BOTTOM OF THE PAGE
Users who liked this:
PMTV now trading. Selling In the mid 25.40’s. That’s barely above 8.5% ytc, lower than their peers. No thanks.
Showing PMTV trading at $25.45 this morninng.
I sold out of PMT-A to buy it. But not at that price now I have nothing PMT. Which suits me just fine.
Call the pref police, cuz I paid 25.43 for PMTV. 8%+ YTC works for me.. I peg PMT as one of the better run mREITs.
Truth be told, I am playing this for a quickie flip. This is a relatively large mREIT baby bond issue so the usual culprits (eg PFF) will likely bid this pup up to silly prices. I’ll happily accommodate them if that occurs!
Maine,
Does PFF typically buy size on the initial offering or typically buy in the marketplace?
Or is there no rhyme or reason?
LT:
PFF buys preferred shares and baby bonds when / if they get added to the benchmark index that PFF follows (the ICE Exchange-Listed Preferred & Hybrid Securities Index, Bloomberg Index Ticker PHGY). This typically takes place on the last trading day of the month, as PFF gets a one day “heads up” on what’s getting added / removed from the underlying index. Usually they manage to get their buys and sells done with greatly affecting the share price, but as we’ve discussed here previously, they sometimes greatly overpay.
Remember this discussion about the Abacus preferred shares? Tex the 2nd wrote on January 1, 2025:
“ABLLL update. We have an answer for the meteoric rise. Yesterday, 12/31/24, the largest preferred ETF (PFF) DID add it’s first position: 363,595 shares @ 33.66. 318K of those were added in a single block @ the regular hour NYSE close @ 4:00 PM Eastern. This is typically how we have seen PFF trade shares in the past. The trade is negotiated off-market, then reported at that time.
I was 100.000000% wrong in my guesses as to what might explain the rise. I said that the PFF traders were exceptionally good and would NOT pay way over the market price like this. Obviously they did. They got the marching order to buy at any price and they did! I do not recall every seeing a PFF trade that moved the market like this one.
The question is whether the index that PFF tracks: “ICE Exchange-Listed Preferred & Hybrid Securities Index” publicly announces the changes in advance. In any event the rise was classic front running. Somebody(s) knew or guessed that PFF was going to add ABLLL and bought up roughly 300K+ shares in advance of them. If the index addition was public, then a great trade. If it was NOT public, then it is a SEC investigation candidate.”
(See https://innovativeincomeinvestor.com/reader-initiated-alerts/comment-page-7/#comment-142412, a link that has since been “scrubbed” due to the high volume of comments in the RIA page.)
Moved from the Bond discussion, to highlight for interested buyers. New JPM preferred $100 issue. Series OO. Pays quarterly. CUSIP is 48128AAJ2. Coupon is 6.5%. Credit rating BAA2/BBB (Moody’s & SP). This is a 5-year reset issue. Reset is 5-year CMT + 2.152.
FWP: https://www.sec.gov/Archives/edgar/data/19617/000119312525015003/d838508dfwp.htm
Additional details: https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/jpm-prospectus-supplement-dated-january-28-2025.pdf
I was able to purchase via the Schwab bond desk this afternoon. Paid 101.50. Thanks to Maine for posting this in the bond section on 2/06/25.
Current trading:
https://www.finra.org/finra-data/fixed-income/trade-history?cusip=48128AAJ2&bondType=CA
Anticipating that somebody will ask. Etrade says QDI eligible.
Not real crazy about the price of $101.50 & not really crazy about that reset rate either.
ChuckP – I concur. I just posted two new issues in the bonds section selling par; a JPM 20 year @ 6.05% coupon with 1 year call protection and a Goldman Sachs 20 year @ 6.00% with 3 year call protection.
From my spreadsheet YTC 6.1% at 101.50 today. I assume all big bank preferreds will be called.
You probably should get your own read on YTC.
i am going the other way on the call assumption. My assumption? In 5 years, inflation will be more of an issue. All my $100 issues that trade via Cusip are reset rate issues. With underwritings fees, JPM will let it reset. If wrong and they call, still an okay rate for BAA2/BBB issue.
SteveA,
Might I suggest 5 or 10 year TIPS if you’re concerned about inflation?
10 years around 2.1 over inflation. 30 year has recently been 2.47 over I, but now abt 2.36
I sorta wonder if it’s likely rates go up …but not inflation. In that case weaker credits may default
Last check Tips are 14% of the total debt
I have a large concern about total Government debt. Much more so than inflation. I have no idea why treasury bond investors on the longer duration side have not spiked rates more. At some point, the massive government debt has to impact the long end of the curve driving up interest rates on preferred’s. Preferred rates are determined more by the longer end of the curve.
I do not care about govt spending cuts or tax cuts, as much as I care about the national debt. So I dislike large deficits whether caused by excessive spending or excessive tax cuts since it increases the national debt.
Tips will not help with that concern. I just don’t want to be locked in to fixed rates for things that are less liquid than the $25 preferred retail issues. So for these that trade via the bond desk, I have a preference right now for fixed rate – reset issues.
My guess on the long side rate not being higher is that outstanding debt greater than 10 years is only 2% of the govt debt.
Unfortunately Fidelity not offering this issue.
Schwab accepting orders for PMTV, no bid or ask,
Thanks!
Was this on the phone? What price did you get?
Trading starts on the NYSE today — PMTV
https://www.nyse.com/quote/XNYS:PMTV
Zager and Evans last trade on grey/gray market
Thanks af
From PFFR. Am disappointed to see ROC in the distribution.
InfraCap REIT Preferred ETF (NYSE Arca: PFFR) declared a distribution of $0.12 per share to
shareholders of record at the close of business on January 21, 2025, payable January 28, 2025. The Fund
estimates that 27% percent of the distribution, or $0.0324 per share, is attributable to return of capital and
that 73% percent, or $0.0876 per share, is attributable to dividend income. All amounts are based on U.S.
generally accepted accounting principles which may differ from federal income tax regulations.
Not unusual for a REIT- might be depreciation deduction > ROC. That looks like their ave %.
PFFA had a lower %
A quick ck of their site shows no form 8937 for last year, also not uncommon for all the 19A amounts to go away at the end of their year. There is an 8937 for 2019.
Good points! Thanks, Gary!
whats happening with sach-a why is it 20% down
I don’t follow SACH, but the common stock is $1/sh and the company is losing money. Best guess is someone with a lot of shares pumped it in early January after SACH redeemed SACC with the hope more rate cuts are coming, then they dumped recently when the feds halted rate cuts and we got the hot inflation report today. I don’t mind a little risk now and then, but not SACH.
ty–guess someone woke and decided it was ‘crap’–which is true (in my opinion). No new news from them that I can see. 4 times normal volume–can only guess it was a fund dump.
Hdo dump
I do recall they were really high on SACH a couple years ago. If they are just now waking up to the outsize risk in the Common, yikes !
TRTFF (7.625% preferred, will be TRTN-F) 24.55×24.75.
MITN (9.5% 2029 senior BB) 25.03×25.04
poorly performing stock creeping up today: EIX
I bought a bunch this morning
I might hold for days…..or seconds
PBI +9.8% on earnings today. PBI-B +2%
NGL down 17% on earnings today. NGL-C down only 6 cents.
BNJ closing price 2/10 @ 7% yield
Last two small windows to get it at this price were:
mid Jan 2025 and August 2024
This is a perpetual sub note backed by BN (cap $90B)
These notes are rated Baa2/BBB
Why $16?
Gary – Due to the low coupon rate of 4.50%, high probability these perpetual notes never get called and have no maturity date, so essentially they are an annuity.
Thx- always wary of Brookfield.
I’m totally avoiding Brookfield and give warnings ever since they stole my money in a default after an acquisition. But they’re a successful company if you are on the right side of their shenanigans.
martin g – I concur. I would never buy any preferred stock securities nor any positions with any companies that have been acquired by them etc. but for these particular debentures, the guarantor is basically the mothership.
There is definitely junkier stuff out there that people are buying for 7% yields.
these are also QDI
I know some people don’t like Brookfield but I am fine personally owning the sub debt of BN, BIP and BEP as those are the main entities of Brookfield, as they own multiple assets in/under each of those entities. All of those 3 entities are very good at shielding off the many subsidiaries (subs) (as in non recourse to the parent co) they own. The subs they own underneath them I would be more wary of as far as the potential “shenanigans” people are nervous about…
Just my 2c but I own BNJ, BIPI and BEPI/BEPH – all QDI and perpetuals but 7-7.5% currently with QDI is a pretty good rate for high tax investors imo for Ba/Baa stuff.
Z – I’ve been waiting to get BEPJ @ par or better. Anything logistically different in terms of tax withholdings etc. with respect to BEPI/BEPH with the “Canada” nomenclature? I also like their infrastructure partnership as those sub notes have traded quite well.
Charles M – For retail BBs etc. I rarely come across any debentures that are senior secured. If you have something on your screen, please share.
No Theta, I look on FINRA and compare to a company’s preferred just to see what bond buyers think of the parent company. Some people mentioned to be wary of EnStar preferred and I looked and decided if there was a risk to holding O and P I decided the bonds were less risk. Just something I do.
Charles and theta,
Curious on your opinion on the PSB preferreds. I see the endless buyer appears to have left the building,
I think we had a conversation on this is the past because I remember emailing with the Link CFO and being told no financial info on the poarks would be released
Lt, I mentioned that park is now inside Brookfield? ( On my cell, limits looking up) These preferred must be thought highly of as they have made low ball offers to buy back. Something happens I don’t think the market would treat them the same as the junior subordinated notes.
Perhaps Theta would comment, I respect his opinion a lot.
I think it was his quote that the loss on one bad investment will put you back on any profit you have made on good investments. Or something close to that. I try to remember that.
Charles, Link is Blackstone, not Brookfield. All I was told was Link is part of a Blackstone fund now
off the top of my head BEPJ is same as those two and I believe is QDI – other than a higher likelihood of call (since higher coupon rate) so not as much leverage to declining rates as it trades around par
BIPJ I dont believe is QDI though
plz confirm but pretty sure I have that right
In what way did Brookfield steal your money? They acquired a company and it went bankrupt. They lost their common equity and you lost your preferred equity. Bankruptcies happen all the time in high risk industries like shipping and this particular shipper was distressed when they bought them.
They also owned a company that exclusively owned office buildings in downtown LA that also went bankrupt. Also no surprise.
Don’t expect Brookfield to throw good money after bad if one of their investments sours. BPY preferrreds could be next, although that one is more strategically important to Brookfield and they have already thrown some good money on top of that value incinerator.
@Landlord, that’s also a perfect example. Did you follow the DTLA story from the beginning? The original preferred investors won a settlement. Comments (obviously forward looking and “protected”) by Brookfield also contributed to the settlement.
https://www.sec.gov/Archives/edgar/data/1575311/000157531115000002/dtla2014123110kex991.htm
https://www.ktmc.com/mpg-office-trust-preferred-litigation
The practice of buying property portfolios and cashing out with refinancing, diluting the equity holders is their playbook.
Qniform DTLAP is still trading. Current ask 6 cents on volume so low the flippers would be trapped at Fidelity.
All the comments I have seen on here from everyone are good observations from years of watching.
We were told a couple years ago the commercial real estate market was going to be in trouble as the Fed raised rates. This is not even counting the damage done from the shut down during Covid.
When the Feds started cutting rates there was a glimmer of hope a lot of these Real Estate conglomerates who had been leveraging debt would be able to recover,
Landlord Investor is right, The walk away that these companies like Blackstone and Brookfield have done with properties in San Francisco, Los Angeles, New York is good business for them and bad business for the lenders.
Investors who want to play with risk can bet on the preferred’s of the subsidiaries not defaulting, they can buy the preferred’s of the banks left holding the bad loans etc.
Let’s just say it’s a minefield out here and safer to stay with the too big to fail banks and the debt of the main sponsors of these deals like Black Rock, Blackstone, Brookfield etc. As Z observed below.
Landlord I am in your boat on the main Brookfield entities (BN,BEP,BIP) that have sub debt – they own a bunch of subsidiaries, gate them off from each of those 3 motherships (intelligently and as we all would do) and then if one of those underlying subs doesn’t perform there is a possibility they will walk away but the parent co is still fine… That’s why I only own the parent companies, not the subs underneath personally and rates arent that much better at many of the subs anyway.
by no means are the Brookfield entities bulletproof but I’d certainly prefer those from a risk perspective right now, than trying to bottom pick names that are in some form of distress or existential risk with the same or less rates (particularly tax effected for the QDI here)… it seems folks here are more conservative than me, except when a name gets rocked with potentially existential, news then people try to bottom pick prefs / bonds there… generally no interest in that for me.
Agree, Gary! Always very wary of Brookfield myself. Master Shell Shufflers.
All of these are perpetual, BNJ Issued 11/17/2020, BEPH issued 4/12/2021, BEPI issued 12/07/2021 At this time I don’t see any of these being called.
good comment..bnj/vclt pair has seen bnj outperform since march 2023..on a 3yr horizon its trading near fair value.. was 2 sigma rich in november and 2 sigma cheap in december 2023
ISSUER of BNJ: Brookfield Finance I (UK) plc
Why a UK PLC ? I am thinking there would be no withholding problems since they are a tax treaty country. Odd one.
Gary – Here is the Summary from the original IPO prospectus:
THE OFFERING
Issuer:
Brookfield Finance I (UK) plc
Guarantor:
Brookfield Asset Management Inc.
Guarantee:
The Notes will be fully and unconditionally guaranteed, on a subordinated basis, as to payment of principal, premium (if any), interest and certain other amounts by the Company.
Security:
4.50% Perpetual Subordinated Notes
Ranking:
Subordinated unsecured
Principal Amount of the Notes:
$200,000,000 (or $230,000,000 if the Underwriters exercise the Over-Allotment Option in full)
Denominations:
Minimum denominations of $25 and integral multiples of $25 in excess thereof.
Ranking of the Notes:
The Notes will be direct, unsecured and subordinated obligations of the UK Issuer and will rank pari passu without any preference among themselves and pari passu with any UK Issuer Parity Obligations but junior to any UK Issuer Senior Obligations and senior to the Ordinary Shares of the UK Issuer.
Ranking of the Guarantee:
The Notes will be fully and unconditionally guaranteed, on a subordinated basis, as to payment of principal, premium (if any), interest and certain other amounts payable by the Company. The obligations of the Company under the Guarantee are unconditional, unsecured and subordinated and the rights and claims of holders will rank pari passu without any preference among themselves and pari passu with all Company Parity Obligations but junior to all Company Senior Obligations and senior to the Company Shares. See definitions in “Description of the Notes — Subordination and Waiver of Set-off Provisions — Subordination of the Guarantee” below.
As of September 30, 2020, the Company Senior Obligations for borrowed money totaled approximately $8.6 billion, which includes the Company’s guarantees of approximately $5.1 billion of existing unsecured senior notes of Brookfield Finance Inc. (“BFI”) and $600 million of 3.50% notes due 2050 of Brookfield Finance LLC (“BFL”). In addition, in October 2020, BFI issued an additional $400 million of 4.625% subordinated notes due October 16, 2080 (the “2080 Subordinated Notes”) that are also guaranteed by the Company, which guarantee constitutes a Company Senior Obligation. As of September 30, 2020, the Company also had outstanding approximately $4.1 billion of Class A Preference Shares, which as of the Issue Date will rank as Company Parity Obligations (see definition in Description of the Notes — Subordination and Waiver of Set-off Provisions — Subordination of the Guarantee) to the Guarantee.
Brookfield is a Canadian company with different divisions each separate. Branches in Canada, US and United Kingdom. This was issued in the American market in US dollars. I don’t think you have to worry about any affect on foreign taxes.
With Brookfield if I wanted to invest I would look at senior secured notes direct obligation.
That being said, I can’t justify buying anything unsecured from them.
I saw all of that before asking- UK just seemed strange.
thx
Ashford is trying to sell two new unlisted Preferreds.
Didn’t see this in either sandbox or RIA.
https://www.sec.gov/Archives/edgar/data/1232582/000110465925010565/tm2430524-6_424b3.htm
Crazy action in CTA/PRA this afternoon. $65 / $70 current bid / ask
lol. Just sold my shares for 69 each. That is like a 5% yield. Is this puppy being called or what? Now that was a great reader’s alert. Speculation is that someone read that SA article and is getting it confused with CTA-B.
The alert doesn’t help much when Fido Nanny wouldn’t let me place an order last Friday or before market open today.
I also opened account at IBKR for low volume stocks and much bigger bond inventory ..I found I was using way too much energy dealing with fido
. the cta.prb/vclt pair saw cta signficantly underperform from july 2022 to december 2023 from which point it has outperformed… on a 1year horizon its currently trading near fair value .. it was 2 sigma cheap in august and and 3 sigma rich in august .. coincidentally cta/pra gapped up 10 points today putting the pair at multiyear high
I’m not sure it’s an alert, but ESGRO and ESGRP are ex this Friday. They have run up into the ex date the past 2 quarters.
While I’m here, I’m wondering what people make of this:
Mass Mutual Funding , AA+ rated 5 yr debt is under 5, but the annuity company Mass Mutual Ascend (A++ insurer financial strength), is offering a 5 yr fixed annuity at 5.5% with $250k min (slightly less % for lower amounts).
As I already have the state guaranty limit with MM Ascend, do people think another $250k with them ,not subject to a guaranty fund , is any less safe?
IE is the fund really relevant if MM Ascend defaults, as prolly every insurer would be in trouble before that?
I’m considering the second tranche because it’s better than most 5 yr bond yields , I won’t need the cash, and the interest isn’t taxable until I withdraw the money…could conceivably roll it at the end of 5 years and would not have to pay the tax until the next annuity matures (or roll again if my understanding is correct)
Posted on sandbox reply
good comment ..esgro/vclt price pair has seen esgro outperform since september 2024 (post plunge).. its currently trading at bottom of that uptrend
Lt I want to address the first part of your post but over on the sandlot
Anyone able to buy PMTV on Schwab yet?
If you enter the Cusip and agree, it currently shows last trade at $25.17. It
did trade at $25.50 a few days ago as the Price/Yield Chart indicates. Finra typically picks up baby bonds on the second day after pricing.
https://www.finra.org/finra-data/fixed-income
NO ; feb 11
Highly encourage those who post here on III to read the following description of “Reader Initiated Alerts:
“We only ask that comments beyond the breaking news be kept to other pages or this page will be ‘out of control’ and not fulfilling what I hope is a handy alert page.”
Gold hitting all-time highs is breaking news on an income site? Or someone complaining that they aren’t getting premiums on their coins?
Or a chart showing weekend volatility in futures trading?
Nope. What does any of that have to do with income securities?
Perhaps save that stuff for Reddit or X, and please stop clogging RIA.
No offense, Papa Doc, but high prices of gold and silver can indicate pending economic uncertainty such as a recession or a financial crisis. Although it’s price is dictated by supply and demand, people buy gold and silver as a hedge. If we are heading into a time of economic uncertainty or a recession, that could have a significant impact (good or bad) on my other investments, such as preferreds and bonds. I haven’t been watching the price of gold lately, so I appreciated Newbie’s post and thought it was entirely appropriate for this section because it made me pause and think about some of my planned actions, especially some of my preferreds. In fact, I find all of Newbie’s posts to be concise and thought provoking.
I think Papa was just pointing out the most recent examples and was not really criticizing anyone directly in a fashion that was overly harsh. I think we all know exactly what he means and I agree with him. So while mentioning gold hitting an all time high seems perfectly reasonable it is the conversation that comes after it that clogs things up. Many of us are guilty of clogging up this page from time to time. Well at least I have been in the past and probably am right now.
It is hard to follow things as this site gets more users. Even easier to miss things. This should probably be the one place where conversation should be minimized if it does not directly add to the alert.
GOLD ~ all-time high today at $2907 t.oz
I called American Rarities , which had previously quoted me $400 per oz above spot for my 2006 US MINT Gold Eagle Proof Sets.
Now they offered spot +$25 telling me as price has gone up, premium has evaporated.
Does anyone know if they are pulling my leg?
I had originally bough these when the Mint wasn’t updating it’s prices as spot moved, back in 2006. They also took a rewards credit card.
I had been thinking they would be nice to look at but they sit in a safe deposit box.
It – Premium has definitely come down. For a reference point, APMEX is selling original COA 2006 US Mint Gold Eagle 3 coin Proof sets (3 oz total) now for $9,875, so that’s a premium of roughly $385 each coin (from sell-side.)
theta,
thanks
I have the 1.85 oz 4 coin sets and I do see the premium at $358, so it’s not an outlier to say spot +25 on the bid
Freaky Friday followed by M(p)anic Monday
https://www.ig.com/en/indices/markets-indices/weekend-wall-street
SPAM LINK, REMOVE AF AND THEIR FREAKY FRIDAY FOLLOWED BY MPANIC POST! ANNOYING!
It’s actually not spam at all. If one can use/read the chart, it shows the weekend volatility in futures trading with the US futures not open. It shows that the DJ30 fell 300+ on the new steel and aluminum tariffs, and then reversed strongly into positive territory.
TD Bank Group to sell entire equity investment in Schwab. (BBG)
Fabrib raising cash for that fine they were hit with ? or trying to reduce their exposure in the market.
TD Bank Group plans to sell its entire 10.1% equity investment in Charles Schwab through a public offering and use part of the proceeds to buy back C$8B (US$5.6B) of its own stock, the company said Monday, Schwab agreed to repurchase US$1.5B (C$2.2B) of its shares from TD, it added.
Fabrib – Fantastic alert. I am just getting online now but this was an easy 3%+ to be had in first 30 minutes from the open. Nothing but laddering green candle steps right out of the gate.
I’m following up my post from yesterday about buying an ET CUSIP preferred with info about ET’s history of calling preferreds found here: https://ir.energytransfer.com/preferred-equity
The short answer is ET has called all preferreds, $25 or $1000, that reached their call dates. ET-C, ET-D and ET-E were $25 F-F issues. C and D floated for some months, E was redeemed on the call date 5/15/24.
Among the CUSIPs Series A floated for a year and was called 2/21/24. Series B is extant (6.623%, call/float 2/15/28 then 3mL + 4.155%). Series F, G and H all reset on their call dates to 5yy + spread.
Series F 6.75%, 5/15/25, 5yy + 5.134% <–call date in May
Series G 7.125%, 5/15/30, 5yy + 5.306%
Series H 6.50%, 11/15/26, 5yy + 5.694%
If I'd bothered to look into this before buying H on Friday, I'd have known not to expect a long, lovely cruise at the reset rate.
I am a fan of ET in general and have common units of the MLP. It seems that the preferred units may be subject to same tax rules as the common. What is the draw for the preferreds over the common which is at around 6.5% yield?
I would think there would be some tax work upon each redemption…
The Series I preferred can’t be called because they are not callable. Only can be tendered in a custom offer. This came over with the Crestwood acquisition.
You would be truly correct if you said all ET originating preferred were called.
Yesterday I bought this ET series H $1000 CUSIP-traded cumulative, perpetual, reset preferred:
29273VAN0 6.5%, semi-annual, first call/reset 11/15/26 to 5yy + 5.694%.
There are four interest payments before the reset: May and Nov 2025 and 2026.
I paid a smidge over par at high-priced Schwab plus the accrued interest which resulted in a YTC of 6.0%, not great if called but acceptable. I don’t know the odds of a call; I’m just rolling the dice. At least I don’t have too long to wait. I’d buy more if it traded under par.
r2s—I looked at the trading history on finra. Very few trades under par and I think they were dealers buying from retail sellers in small quantities. If rates spike, for whatever reason, in the next few weeks, I think a buy under par would be a good idea. Thanks for posting. My own investments in the last 12 months have been heavily in $1000 issues—both debt and preferred’s. They are basically buy and holds with good adjustments on the call date.
Whidbey, Have you been buying perps? or maturity dated make whole bonds?
If you have been buying set dates on companies you like, how far out have you went?
Charles—a combination of both. Almost all IG, however I do own some Citicorp issues which are Ba1/BB+ that I bought a while ago at much lower prices. If I like the reset terms, I’m not worried about buying no maturity date issues or long maturity date bonds. To me, they’re the same. I like the preferred $1000 issues because of the qualified dividend.
WI, are there any Citi CUSIPs that you still think are good buys?
Whidbey-
Error correction: The preferred pays dividends not interest.
I’ve been asking myself why I chose to buy the ET reset preferred now. If I wanted an ET preferred, I could have bought ET-I with a CY of 7.2% and bought the reset preferred later. My reasons were I wanted to grab par while I could , and I miscalculated the YTC…LOL.
If it does trade below par, I think I’ll investigate ET’s propensity to call its resets. The only way I can think of to do that is to read old press releases. Ideas?
rocks,
Both the company’s website and last year’s 10-K list Preferred Series A through I and disclose their redemptions of ET-A through -E.
https://ir.energytransfer.com/preferred-equity
Also, here’s the result of a search (keyword “redemption”) on their website:
https://ir.energytransfer.com/search?query=redemption&f%5B0%5D=type%3Anir_news&op=Search
You can ask their Investor Relations department if they redeemed any others:
InvestorRelations@energytransfer.com.
mbg Quantum lists the ET-PI as a 144a stock? has anyone tried to buy it lately.
Charles-
Yes, ET-I trades freely.
YH,
IIRC, ET-I is not good for IRAs. It throws off UBTI.
I have owned other ET preferreds over the years (incl. in IRAs) and haven’t had any tax issues.
Charles, IIRC, ET-I is a 144, but it is an odd issue.
It wasn’t issued by ET “in the normal course” – it was issued as part of an acquisition to replace an issue of an acquired company, so it doesn’t follow the “rules” for other ET preferreds. For example, it throws off UBTI, which (most, maybe all?) other ET preferreds don’t.
The conversion terms for Energy Transfer’s Series I Fixed Rate Perpetual Preferred Units (ET-I) are as follows:
Optional Conversion by Holders: Holders of Series I Preferred Units can elect to convert all or a portion of their units into Energy Transfer common units, provided the aggregate value of the units being converted equals or exceeds $20 million or the remainder of the holder’s Series I Preferred Units. The conversion ratio is initially set at 2.07 Energy Transfer common units for every 10 Series I Preferred Units. This conversion is subject to payment of any accrued but unpaid distributions up to the date of conversion2.
Conversion in Liquidation Events: In the event of Energy Transfer’s voluntary liquidation, dissolution, or winding up, holders can convert their Series I Preferred Units into common units at the applicable conversion ratio, again subject to payment of accrued but unpaid distributions2.
Conversion at General Partner’s Election: The general partner may elect to convert all or a portion of the outstanding Series I Preferred Units into common units if specific liquidity conditions are met. This includes a requirement that the volume-weighted average trading price (VWAP) of Energy Transfer common units over 20 out of 30 trading days exceeds a threshold price (initially approximately $66.14 based on the initial conversion ratio). This conversion is also subject to accrued but unpaid distributions2.
These terms are detailed in the partnership agreement and are subject to adjustments as specified in applicable agreements or conditions.
Thanks, mbg. I will post the redemption history.
Do the ET preferreds pay “distributions” which have a portion of dividend, a portion of return of capital, etc.?
New stuff for me and interesting topic…
Whidbey-
Error correction: The preferred pays dividends not interest.
Are you referring to ET’s preferreds?
They don’t pay either. They generally pay “guaranteed payments”, which appear on the K-1.
But I think Whidbey was referring to 1000 Preferreds in general, like this one:
https://www.sec.gov/Archives/edgar/data/831001/000119312525021394/d926066dfwp.htm
i think this is a good buy. I have 38% of my preferreds that are fixed rate reset. Excellent reset rate. Maybe it gets called but if it does 6% works for the next 21 months
I bot sce/prj ftf 9/15/2025 sofr +300 at 22.85..assuming in trades near parity 25 ytc 21% ..traded at 25 in november
Mj welcome aboard, I hope we don’t have to start bailing this leaky tub. I have followed SCE for years and past history is no indication what might happen in the future. I remember H and F and I think even E. One of these had partial calls before being fully called if my faulty memory is correct.
I’m taking a risk granted., but I don’t think they will go BK but you never know. I do know that if they are suspended it would hurt but not the end of the world.
TRTFF, the latest OTC version of TRTN-F (7.625% preferred), printed 24.65 this morning.
The CY for TRTN-D is 7.6%.
R2S they seem to keep printing the preferred oh I meant money. I don’t see where Brookfield has called any of the outstanding preferred. This being shipping which can have a nasty downturn in a recession. Doesn’t look like we are headed for one anytime soon though.
I’d be more interested if it was a term preferred. You see BIP notes? due 2084
7.25% almost at par. I know I will not be around then.
QUANTUMONLINE – For those who have noticed a downward direction in QOLs service recently, there’s now hope….. I know I’m used to trying to send them new info such as notices of call or changes in an issue (such as HTLFP to UMBFP) when I see they are not up to date… In the past they were always gracious to acknowledge the help and quick to update their files… Recently, that’s not been happening (they just updated ANG-A’s CALLED status today when I emailed them the day after the announcement and never received acknowledgement) and I called them out on it. I received this response:
“Thank you for your feedback. We always want to know what our users are thinking.
“We do appreciate your forwarding us information regarding individual securities and I can assure you that your information is being passed along to our research department for review and update. The timeliness of these updates apparently is slipping and for that we apologize. We will look into why this may be happening. The research people are in a different geographic location, so we don’t have the day to day contact one might expect if everyone was located in the same office.
“It has been a challenging few years for QuantumOnline.com unfortunately. The original founder passed suddenly in 2020, and then the business was taken over by his two sons, neither of which knew much about the business. Then about 18 months later, one of the two sons passed as well (the son most involved in running QuantumOnlilne.com). And we have very little contact with the remaining son. In fact, we heard about the other son’s passing via an Internet search.
“And, for whatever reason, the financial contributions to the website have tapered off as well, making it more difficult to properly staff the research department as well as make technical updates to the website. Hopefully, we can right the ship and get back to where the website was previously, however, there are quite a few headwinds at the moment.
“We appreciate your patience as we work through this process. Please continue to send us any updates and we will do our best to incorporate them as quickly as possible.”
Like Tim, these are good people and their service deserving of contributions, both financial and information wise.
apologies for putting this in Reader Initiated….. I was aiming for Sandbox and don’t know how it ended up here…..
2WR it shows you posted late my time. Must be even later East coast time
I did a little sleuthing awhile back and the QOL website address tacked back to what I thought was an older gentleman living in a house in Florida older than he (or is it him?). It’s at that point I was thinking it’s a 1 person show. I’d doubt there is any “research department.”
On the internet you can be anything you want if you have a cool website. As an example I found a mysterious-sounding hedge fund one day years ago…but it tacked to 2 intelligent high school kids in Farmington , Mich.
To make a long story short, they both went off to college and at graduation, wanting good jobs they had to scrub every vestige of anything inappropriate.
That website , which indicated they were mysterious Russian billionaires who invented pubic follicular arrangments had to go …. Well, they did SPEAK Russian as well as English.
Anyway, one ended up with a double major in econ and music at Duke on a full ride, worked in IB for 2 years then got a PHD in music from Yale on a full ride. He moved to Moscow. Worked for McKinsey there until they shuttered that office. I always suspected he was working for the CIA because he was fluent in English, Russian, German, and French .
The other kid graduated from Michigan business school, then ran a trading firm for years before inventing a nonsense stablecoin . He made $63 million on that. Both are now mid 30’s.
So, reality turns out to be somewhat more odd than fiction.
losingtrader, this site and Quantum offer valuable information put out by some dedicated people. It’s hard to find someone else who is as dedicated to what to you is your passion.
I belong to a group loosely connected to other groups across the nation dedicated to the hobby of grafting and saving rare fruit trees from extinction.
As the folks who founded the group grew older it became harder to keep up year after year. They realized they needed to get younger people involved. They handed off the torch in the last couple years and in Dec had their annual board meeting. All the positions were open on the board. Not easy running a non profit especially if its a hobby and not your passion.
I knew a guy named Doc Reynolds, from the Reynolds family of Dean Witter & Reynolds fame. a Harvard grad whose passion was collecting books for the blind and distributing them to schools worldwide especially 3rd world countries. People who knew him told him he needed to set up a non profit so the good work could be continued. He refused for a number of reasons. One he said he didn’t want something that was more of a business than a charity.
That deserves a movie !
Gary, he was a professor at UC Davis, His students loved him. He always had stories to tell. Consider the people who he went to school with at Harvard. He knew the prior king of Saudi Arabia. Told me a story about shipping braille books there and how he got help doing it.
Google what was the first mainstream magazine to have a Braille addition.
Blackrock Muni income closed end Fund, MUI will convert to an “interval fund” later this month. Essentially this is a conversion from closed end fund to an open-end fund with limited quarterly liquidity “windows”. Nav = 13.33 and shares can be bot today ~12.10. Shares will be delisted with last day trading NYSE on 2/14. Port manager states income should remain the same or slightly better even though leverage will be eliminated as charter will allow for high yield muni bond portfolio inclusion. DYODD
Very interesting. Do we know what he average NAV discount is for muni funds? I’d expect a sell imbalance of some type on the last day.
I’d buy and hold if a big enough discount
tey cefconnect.com, it may provide the NAV for each fund.
AmTrust Announces Quarterly Cash Dividends on Preferred Stock
NEW YORK, February 5, 2025 – AmTrust Financial Services, Inc. (“AmTrust” or the “Company”) today announced that its
Board of Directors has approved a cash dividend per share on the following series of non-cumulative preferred stock:
Series Rate Dividend
A 6.750% $0.421875
B 7.250% $0.453125
C 7.625% $0.476563
D 7.500% $0.468750
E 7.750% $0.484375
F 6.950% $0.434375
The preferred dividends will be payable March 17, 2025 to stockholders of record on March 1, 2025.
Thanks Fabrib
Charles, did you have any opinion or ownership of the PSB series?
I see the endless buyer at 13.14 is gone
Lt, you had to ask me a question I hadn’t needed to think about because I wouldn’t buy them. Crazy for someone who buys SCE preferred.
This is my reasons.
First off they are perps. but cumulative, so they never have to be called.
There have been some buyout offers by the Private Equity company but way under Par. instead of 25.00 I think there have been offers around 16.00 to 18.00 there is speculation by investors not proven that if they can buy out enough of each preferred they can quit paying. People also say the Private Equity will not support any buyout companies, they have to stand alone and earn their keep.
Second reason I haven’t considered them is who opens them. Blackstone.
Just my impression of them and Brookfield
Consider this is a business park Reit. What was their debt before they were bought? has the good properties been stripped out and sold to another Blackstone Reit or the opposite and this REIT is one of their main vehicles they use to own business properties with? Is there a possibility they move poorly performing other properties into this holding? it’s possible.
P.E. is known for short term borrowing to buy a target then load it up with debt to pay off the short term loan. They are also known for installing their own management and charging a management fee when the company didn’t have to cover this out of profits before when they were independent.
There are other tricks like slicing up all the assets. Like selling the buildings to another Reit they own and make the business pay rent.
I’m not saying Blackstone is doing any of this, but why take the risk for 2 or 3% more? You can try buying REXR-PB to get a 7% return and sleep better.
If anyone is holding SCE or contemplating a purchase, you might find this informative. Personally, I’m staying away.
https://newsroom.edison.com/releases/edison-internationals-utility-southern-california-edison-submits-reports-on-eaton-and-hurst-wildfires-to-state-regulators
MarkS – I concur. For instance, I would take newly issued FGSN over that all day, still a few pennies under par here @ 7.30% yield. Company has $4B cash vs. $2B debt, levered free annual cash flow of nearly $2B. And they part of FNF.
Mark it’s difficult to get an accurate estimate of cost for the Hurst fire. Edison admits their equipment started the fire and it was contained to approx. 800 acres with a lot of the burn area in the Angeles national forest.
When I googled it, AI was completely useless. It wanted to include the estimated cost of all the wildfires that occurred in Southern Ca.
Charles,
Just by looking at a map of the burned area for Hurst shows very little in the way of actual destruction of property. Like buildings, homes, etc… Hurst is not the worry at all. It never was once contained which it was in early days compared to the others.
I have a feeling you know this already though. It is so inconsequential nobody really cares to add up the numbers yet. The other fires are much more “sensational” and head line grabbing.
The order the fires started in may matter. For instance, if the smaller one strated first due to SCE negligence then embers from it started the rest I imagine that would be a different situation than if it started later.
Liability can be difficult to trace. I am sitting tight right now and if things go badly I will double down on everything at some point and just wait it out.
Of course, my plan may change tomorrow ;o)
The Hurst fire and Eaton fire are more then 20 miles apart.
Eaton fire first reported around 6 pm.
Hurst fire first reported around 10 pm and 20 miles from Eaton per fc.
Interesting to read the two risk profiles III’ers have for SCE preferred’s.
Charles take your pick:
AccuWeather estimated that these fires could result in damages and economic losses exceeding $250 billion.
JPMorgan analysts projected that insured losses from the fires could surpass $20 billion, setting a new record for wildfire-related insurance claims in U.S. history. They also estimated total economic losses at $50 billion.
From Vox.com:
Verisk, a risk analysis firm, calculated that insured losses would total between $28 billion and $35 billion. CoreLogic, a property analytics company, put that bill between $35 billion and $45 billion. Economists at the University of California Los Angeles pegged the insured losses at $75 billion.
Dan, sitting on about a 5% loss on my SCE Trust preferred not counting interest. With returns it’s less than that 5%.
I lived with the 2018 and 2020 fires in Northern Calif. I bought PCG after it was sure they were coming out of BK and going to pay the suspended dividends and after the dividend collectors got that big pot and sold and moved on I bought.
This time I am taking a risk buying before the smoke has died.
haha nice name, Mark S
Re: SCE
The last 2 years the dividends were declared on the 4th Thursday in February.
This year the 4th Thursday in February is on the 27th. I see EIX common as a test case. With a prolonged investigation ahead it seems too premature to adjust the parent dividend (EIX common) which could be interpreted as a tacit admission of guilt ???? Far too early to write down destroyed assets in the balance sheet???? Maybe at the end of the first or second quarter????? JMO. Lets hope EIX common is not the canary in the coal mine.
Private may well have it right in his post. He is a really smart guy. I respect his opinions.
Has anyone considered the SCE Trust VII 7.50% Trust Preference Securities? I am considering a purchase wanted to check in with the experts first
I have been buying M and J. I am not an expert and according to my wife I barely know what I am doing.
Some EIX bonds briefly hit 6.9% YTM earlier in the week now are back down. These are make whole but junior to the SCE I think someone said. Full up on tranches of SCE and in the black only on the L but then I mainly bought for the income.
(Fc’s comment is great!)
I bought the SCE Trust VII the morning after it bottomed, then sold it 11 trading days later. I intended to invest in it, not trade it, but as I followed the story I chickened out.
I also bailed on all my SCE Trusts yesterday
I sold mine.. California is sue happy…other comparable yields..
OK, what are the comparable yields? Utilities only please.
David,
There isn’t much to compare with it. The best you can probably do is 6.5% when there is a dump into your bid. But once again those other UTEs are not currently dealing with fire damage and lawsuits. We have to admit to ourselves we are dumpster diving with SCE and taking on considerable risk. But after PCG and HE.. the end result for preferred holders.. I am feeling frisky enough to dive in.
fc, I just finished twisting Fidelity’s arm to let me place an order for a PCG preferred at a YTC of 7%. If it hits, good. If not I’ll continue to collect 4%
I have bought both EIX and PG&E bonds in the last week. Holding for the income and NO, I’m not concerned about any repercussions from the fires. Those of you who’ve sold recently…thank you for the extra yield. What you’re all missing is state law that limits a utilities liability and that allows the utility to recover liability cost through rate adjustments. It’s all part of the wildfire legislation passed after the PG&E fiasco of a few years ago.. The utilities bond holders simply won’t take a hit from wildfires.
I figure when there is a definitive statement that SCE was involved there may be a swoon where more shares can be picked up, but if the new liability limiting laws work as they should it won’t be much of one. They might even go up if it is clear that the exposure is limited so I have only nibbled here and there, but have kept some powder dry in case the bottom falls out. PCG preferreds absolutely tanked when they had liability. That was a good chance to have a big gain if one was comfortable with the risk.
I hold only a few preferred issues and none are from California utilities. I haven’t looked at the SCE preferred issues but I’m going to assume they have the standard 5 year interest deferral clause. That clause is why I stick to corporate bond issues.
relative to vclt sce preferreds are trading at all time lows (underperform)
It’s great except for the litigation risk. Personally, I think it will be fine, but I wish we had Grid’s expert opinion
I am obviously not Grid, but he and I used to talk about California utilities a lot. Wish he were around…
I bought the SCE-M, mostly at/below $23. Personally, I am not very worried about it. In CA, utilities are legally responsible for fires they cause (even if not negligent). However, the governor and PUC (who are both firmly in utilities’ pockets) won’t let anything hurt the utilities.
In the last few years, for example, Pacific Gas and Electric has been through BK twice because of fire liability (and they are a convicted felon because of their behavior), but their preferreds/bonds didn’t suffer at all. In fact, they mostly went up.
The State has funds in place to backstop utilities’ insurance, and our idiot governor went so far as to strongarm the victims of the 2018 Camp Fire (burned whole towns, killed 85 people) into accepting that the victim compensation fund would be funded primarily with PCG common stock! So, victims only get paid in full if the company that destroyed their homes and killed their relatives is successful.
I expect that behavior to continue. The state says it can’t let the utilities fail and they need the utilities to remain financially strong enough to invest for our future (so they say over and over).
So, I buy SCE and PCG preferreds and debt while mr. market punishes them.
Dan ; I bot 1000 sh of this on Jan 16th ; I’m down a full point; I mentioned
here i thought it was a “no brainer” and I still do ; there seems to be little chance even the Parent will need to reduce it’s div. ;
from my research ; this post is simply to tell you what I did and not meant
to influence your decision in any way .
The temp ticker for TRTN-F changed from TRTFV to TRTFF.
https://www.otcmarkets.com/stock/TRTFF/overview
TRTFF
Triton International Limited
Preferred Stock – PREF SHS SER F
Penny Mac 9% Baby Bonds, symbol PMTV, incoming. Still not showing temp symbol on Daily Additions list.
Fan59,
My understanding is that unlike many preferreds which trade briefly on OTC w a temp symbol, when a debt instrument (e.g., a baby bond, like PMTV) begins trading, it only begins trading with it’s permanent symbol, and only on it’s regular exchange, like the NYSE – often several days after it comes out with the FWP term sheet. This morning, I checked w my broker Fido about buying it via it’s CUSIP. They told me it only becomes available on the secondary market on the settlement date (Feb 11 for PMTV) and to call them then. They’ll check their inventory and if they have some available, they’ll tell me the bid and ask.
Thanks, mbg!
Not using a temp symbol — per the info sheet Tim posted today.
NewtekOne…
Any IIIer’s familiar with this company or its Baby Bonds
(NEWTG, NEWTH, NEWTI)…assuming higher risk with higher 8.0 – 8.625% coupons.
Small company. Good management. I own reasonably small amounts of all the baby bonds, and bought more NEWTZ today – decent YTM with a good probability of safely making it to maturity. NEWT has been a long-time III favorite even back when it was a BDC before it changed to a bank holding company. Still, DYODD.
I own NEWTH and G
i think the risk is the same ; the differing coupons are strictly based on what they have to pay on that date to get it done ;