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What am I missing? I have been scaling out of Ziono since the bid went to 26.4 today I got lifted on some at 27.72 which is a negative ytc even if they don’t call it for over a year.
If I owned any ZIONO I would be selling it all after that amazing run up. There was a nice volume spike when someone entered in a large way a couple of weeks ago but now? Who knows. Any sane bank would call that immediately.
I follow the Series ; I have ZIONL at 25.25 and i’m expecting a call ; unless they wish to continue with the float rate ; 9.4% next ex date 2/28 and call opportunity ; ide be inclined to wait on selling Ziono till you see it topping out ; there is still another 30 days for the dividend to accrue ;
ECCF active @ FIDO
Can’t buy …Expert Market error
Good grief
FYI. You can currently purchase on Merrill Edge
Can be purchased on ETrade – last trade $24.68 – volume 35.51K
Purchased on Vanguard, 24.69 and 24.70
I was able to buy ECCF at Schwab by calling in today – it took quite a while and a callback though.
Schwab is bad about getting new listings posted ; this one is still not on Edge , and they still have no quote for OpA; you should not have to CALL them
They do have ECCF loaded into schwab.com and SSEdge, they just have it mistakenly marked as expert market. Still irritating, but at least I was able to trade it by phone (and chat).
OpA is the wrong symbol – it’s O/PR on schwab.com and Op on SSEdge. I kind of blame O for doing something confusing there.
what is funny about ECCF (and many new issues at schwab) is that you can actually get quote information in the little “quote” box at the bottom of many Schwab pages way before it shows up in the research pages, SSE, or anywhere else on schwab- like this https://client.schwab.com/secure/cc/research/stocks/stocks.html?path=/research/client/Stocks/Charts/&symbol=eccf (you have to be logged in to see it).
Even when the charts/data in the main part of the page isn’t working for a new issue, the little box at the bottom usually works (different data source). Trading doesn’t work any better since schwab “fixed” it last year (used to be able to trade from the little box at the bottom – now just takes you to the regular order page).
I picked up a bit of ECCF this morning at $24.67x, but had to call. Broker I talked to said he would get the back office guys to fix the expert market flag, but it usually takes a day for that to be fixed.
i see ; thanks for the update on Schwab; Op is not worth it ; ide rather hold the Common ; yields are similar and O gives you an increase every year ; imho
Nisource approves redemption of NI.B
From NiSource:
The NiSource Board of Directors approved, on January 25, 2024, the redemption of all outstanding shares of the Series B Preferred Stock on March 15, 2024. March 15, 2024 will also be the last dividend payment on this series of Preferred stock.
Can you tell us where you found this? I’m not seeing any press release from NI.
From their IR. I had sent them an inquiry last week about the reset period and they sent me the above this morning, wasn’t an official press release.
Something sounds strange here… IF there’s no official press release or EDGAR filing then isn’t IR gleefully passing along insider info to you? Then there’s the other possible alternative that happens every now and then whereby they take the official route only and notify DTC or whomever without ever making either an EDGAR filing or public announcement They are also then announcing now, yes within the 30-60 day window they have, but usually companies seem to wait until the very end to do so, meaning on 30 day notice, not the approx 45 day they’d be doing if they’re doing it right now..
I sent an email to IR requesting confirmation of the call. Still waiting to hear back.
Usually we don’t have that type of enthusiastic IR department that is providing future dated materials ahead of time.
The only thing making this more amusing would be for Rida to publish a buy alert today on NI-B.
For NI-A, which was a 144 issue mind you so this is a bit apples to oranges, I don’t recall seeing a “public” notice either. It was only when NI floated the notes to pay for the redemption about 30 days prior to call that the public was informed.
link?
The following was emailed to me from the NiSource IR:
“The NiSource Board of Directors approved, on January 25, 2024, the redemption of all outstanding shares of the Series B Preferred Stock on March 15, 2024. March 15, 2024 will also be the last dividend payment on this series of Preferred stock”
ADM raised the dividend on Friday to 2.00 /sh ; this would indicate the company is not overly concerned about this CEO accounting problem. ex is Feb. 7
i think the debate over the merits of buying ADM is over ; the “train has left the station” !
I sold a bunch of ADM at $55 today. Not sure what the future will hold for flipping opportunity with ADM. I am not unhappy about it – made over well over $10 a share (I will have to add it up – its across multiple flips). I am still holding some (for the moment), but not sure when/whether to re-enter for another big bunch.
Private; i’m taking the other route ; holding the 400 i got at 51.50; this is imho a sock drawer holding ;
Good for you Ted. Probably a better play in the long term.
I am still holding a couple hundred shares ($50.92 and $51.90), but the profit from short term flipping was just the syren’s song to me.
I netted enough to pay my property taxes and to take all the grandkids to Disneyland.
We will probably shoot for end May or early June. We have found that its good to go the week Disneyland is doing “grad-night” celebrations overnight for local high schools. I think it scares off a lot of people (who wants to be in the park with a bunch of hyped up high-schoolers?), but Disney kicks the kids out before the park opens and those days are usually pretty empty (or used to be). Guess we will see.
Good news for ADM holders. After market close on Friday ADM released a letter from its CEO to ADM colleagues stating that the current investigation concerns inter-segment sales and does not materially affect ADM’s financial position or results. ADM stock was up over $53 in afterhours trading. Combining this news with what has been known leads me to believe that the nutrition division’s inter-segment sales were “fraudulently” inflated in order for execs to reap large bonuses. The inflated transfers in and of themselves should not affect consolidated results as nutrition’s inflated results would be at the expense of other ADM divisions. No wonder ADM stated a few days ago that 2023 results won’t be materially affected (i.e. $6.90 instead of $7.00). The CEO’s letter may at least partially allay the market’s fear of a wider fraud.
I have been reading margins are shrinking and so has profitability. Inflation has been cooling so it is difficult for companies to increase prices. ADM also deals with commodities and transportation costs. Prices are starting to cool on the one hand affecting margin but transportation costs with the Panama canal having limited access and the Middle East crisis affecting the Suez canal are driving transportation costs up. ADM has been buying other small companies to grow, the only mistake was thinking they could grow these companies and to do so was the type of excess compensation employed. The excess profitability being created to generate these bonuses in the food business should of been a clue. Lucky it was just a small segment of the company. I am hoping they learned from this to see the clues next time and I think they will considering the affects on the stock price and the unfavorable news it generated.
https://www.msn.com/en-us/money/savingandinvesting/lumen-s-new-debt-restructuring-deal-helps-send-besieged-stock-soaring/ar-BB1hfVln
LUMN debt restructuring . Makes the LUMN 2025 bonds with a 15-16% YTM palatable?
If they’re extending maturity dates in the restructuring, will the 2025 notes get paid on time?
Irish,
I still need to fully understand the deal, but the maturity extension primarily applied to their 2027 debt all of 12.5B to 2029 and beyond.
I think with their new credit facility, they should be able to handle anything due in 2025 which is very small in comparison.
I figured I should make some gains on 2025 maturities since I believe this deal raided the Qwest secured assets jar to enable it.
Friday Core PCE # for Dec = 2.90% Nov ## was 3.20%
Below post from BEA data site ……
Personal Consumption Expenditures Price Index, Excluding Food and Energy
Change From Month One Year Ago
December 2023 +2.9%
November 2023 +3.2%
October 2023 +3.4%
September 2023 +3.6%
The PCE Price Index Excluding Food and Energy, also known as the core PCE price index, is released as part of the monthly Personal Income and Outlays report. The core index makes it easier to see the underlying inflation trend by excluding two categories – food and energy –
They should change the quote: “The core index makes it easier to see the underlying inflation trend by excluding the two [most visible and impactful categories to consumers] – food and energy”
Don’t know about you all…..
Or why……..
But this is the strongest Up day I have experienced in a year and a half
Almost everything is GREEN
11 holdings are up over 2%
(My ADM knife grab stumbled badly mid-day – mostly back to somewhat down. Sock drawer)
Westie, I will buy you a beer so we can get drunk together. Look, I think this is a classic example of blood in the streets and people panicking.
I’m also sure there were some greedy people who rushed in thinking to make a quick killing and panicked when it kept going down and bailed.
We will know better tomorrow. Then you have the weekend off for things to calm down.
I asked you if you had enough conviction to keep buying if it kept going down.
I did.
If people liked it at 70.00 and it yields 3-1/2% now. The division that is in trouble is only 8% of their sales. I read a lot of speculation last night and today and saw where one stockholder filed a lawsuit today before the facts are even known. Let’s just wait and see.
Charles
One of us should worry……
We’re thinking the same thoughts.
When it dropped to $51.00, I added another 1/3 to my position.
I’m pretty heavy now but little/no anxiety.
I’m fond of Pacifico if you’re buying.
I’ll take care of the chips/guacamole
200 @ 51.95
200 @ 51.25
I have another GTC below 51.00 for tomorrow.
805 on tap from Santa Barbara is my choice.
I have had pretty good luck buying ADM after hours this week. About half my pile is under $51, rest is $51.xx (except a partial lot at $52.32).
Looking to sell again above $53, but we shall see. I may have to wait a bit for it to get there.
At some point, I should stop flipping and hold for the “recovery” as volatility slows, but at $2-3 a share, it is tempting to just keep a-flippin’. probably not the smartest thing for an “income investor” (which I am trying to become), but it adds a nice little kick.
Private; the Feb 23 call is trading for about 1.25 ; so sell the call, and if gets assigned, you sold at 53 ; this is what I would do if i was in it as a short term trade .
Thanks Ted.
That would probably be smart, but I will probably wait.
I will probably flip a few times between now and 2/23, hopefully for $5-6 a share total (I did a “mini-flip” of a few hundred shares today for about $0.60).
If I sold the call, I would have to track it carefully and periodically (when I sell the bulk of my shares) own the naked call. Practically, probably not much more risk than flipping, but it feels that way.
That said, ADM has been fun. I don’t think it will earn enough to make my year, but it certainly has made enough to be worth the time. Luckily, its been kind of a quiet week with clients, but next two weeks will be crazy as we rush toward lunar new year (and I will likely be pulling a few all-nighters). It will be the year of the Dragon!
So, I think that is a great idea for once I stop flipping and settle down.
I added another 100 ADM at 51.05 yesterday; it will take some time to back and fill and get beyond all the Ambulance Chasers ; that makes 400 and ide like to add another 100 shares at 51;
Earnings Have Been Horrible Thus Far For The S&P 500
Jan 25, 2024 01:02 PM | S&P 500 Index(SP500) | By: Mott Capital Management
Earnings growth for the S&P 500 has fallen by 4.7% in Q4, with sales growing by 3.5%.
Margin expectations for Q4 have declined to 9.9%, dragging down Q1 margin expectations to 11.4%.
Falling margin expectations are impacting earnings estimates, with full-year 2024 estimates lower at $240.52 per share.
Result?
S&P Up
Makes Sense To Me……….
WIll this mean anything for USA holders?? Partial exchange call for Dish bonds:
DISH DBS Corporation
5.875% Senior Notes due 2024, 25470XAW5/ USU25486AL2
5.125% Senior Notes due 2029, 25470XBD6/ U25486AP3
7.375% Senior Notes due 2028, 25470XBB0/ U25486AN8
7.75% Senior Notes due 2026, 25470XAY1/ U25486AM0
The transaction will be available only to the following holders of Existing Senior Notes (collectively, “Eligible Holders”):
(a) persons who are reasonably believed to be “qualified institutional buyers” as defined in Rule 144A under the Securities Act, or
(b) persons other than “U.S. persons” as defined in Regulation S, outside of the United States, and who are otherwise in compliance with the requirements of Regulation S;
provided that, in each case, if such holder is in the European Economic Area or the United Kingdom, such holder is not a “retail investor” (as defined herein).
It doesn’t seem retail USA folks have the option. But I am not a security attorney. Glad I stayed away from these. If you hold best of luck
New Issue
State Street Corp ( “STT” )
Security:
Depositary Shares Each Representing a 1/100th Interest in a Share of % Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series I
IPTs:
7.125%% area
Size:
$Benchmark
Maturity:
Perpetual
Non-call period:
5-years
Liquidation preference:
$1,000 per depositary share
Expected ratings*:
Moody’s: Baa1 (Negative)
S&P: BBB (Stable)
Fitch: BBB+ (Stable)
Dividend Rate:
(i) From January 31, 2024 to, but excluding, March 15, 2029, at a fixed rate of [●]% per annum. (ii) From and including March 15, 2029, during each five-year Reset Period, at a rate per annum equal to the five-year U.S. Treasury rate as of the most recent Reset Dividend Determination Date, plus [●]%. (Non-cumulative)
Dividend Payment Dates:
The 15th day of March, June, September, and December of each year, commencing on June 15, 2024
Optional redemption:
Redeemable at par (i) in whole or in part, from time to time, on any dividend payment date on or after March 15, 2029 (ii) in whole but not in part at any time within 90 days following a Regulatory Capital Treatment Event
Trade date:
January 24, 2024
Settlement date:
January 31, 2024 (T+5)
Listing:
None
Format:
SEC Registered
DRD/QDI:
Yes
Use of Proceeds:
General Corporate Purposes
Sales into Canada:
Yes – Exemption
ISIN:
US857477CH48
CUSIP:
857477CH4
Thanks EB
I wonder if this is to redeem my STT-D which resets high 3/15..probably. Bea
Wow. That’s a nice offering.
The adjustment at reset is looking to be coming in at a bit over a 3 handle.
Grid, I get the feeling you would prefer to see it much closer to a 4 handle? A low 3.x seems skimpy in some ways.
Fc, Its all pretty much mechanical at this point. They determine the yield it goes to market, then subtract the 5 yr present yield, and then that becomes the adjustment yield. Yes, I dont like a very low 3 handle for 5 years out. But that is largely a reflection of higher credit quality the issue apparently is. So it either fits your plans or it doesnt. I certainly dont think its a bad issue. And the market out of the gate doesnt concern itself with the adjustment yield at IPO anyways. So that shouldnt really factor in for time being and several more years actually.
Wouldn’t the adjustment yield be fairly close to the “going rate”/market rate for a 5 year issue at the time it resets?
In theory, you could see how the issues would trade around par when the reset due to the fact that they’ll soon have a market yield. This is assuming that the yield spread is reasonable.
It’s been a while since I’ve looked at the Canadian market where 5 year resets are more common.
I’ve purchased several 5 year resets through the bond desk over the past year.
Dick, it looks like 2WR got final pricing. It went to market even lower than “whisper rate”. So as you can see the adjustment is even lower. No, there really isn’t any mystery to it. It’s just a simple mechanical adjustment. That 6.7% is too low for me when I can get 6.2% from utes 30% below par. But that is my bias showing.
Grid, I would be more interested if wasn’t a perpetual.
You could play with it as it gets closer to the reset date. Who knows what rates will be then. But if I was still interested in playing the market by then I would hold it and depending on rates sell and re-buy or if it resets higher buy more and hold to term. There are a few out there but this one is perpetual so not sure I am interested
FWP on the STT issue – priced at 6.70% with 5yr figured at 4.087
https://www.sec.gov/Archives/edgar/data/93751/000119312524014363/d726946dfwp.htm
From the date of issuance to, but excluding, March 15, 2029, at a fixed rate of 6.700% per annum and from, and including, March 15, 2029, during each reset period, at a rate per annum equal to the five-year treasury rate as of the most recent reset dividend determination date plus 2.613%.
2WR,
I called the Schwab Fixed Income desk but they have no information of this State Street Corp. CUSIP 857477CH4 from the FWP.
Guess I will have to wait another day to see if I can get some, as the FWP was dated today, 1/24/2024
Not surprising…. I suspect if Schwab is not a member of the syndicate it wouldn’t yet be available for sale…. Might as well give them another call tomorrow to see what they say although I don’t see the attraction to this issue. STT does have STT-G 5.35% which is trading at 24.16 for current yield 5.53%… Then again, Mr. Market may still think STT-G is going to float some day… Ain’t gonna happen. STT-D is no comparison either because it should be called on 3/15 because it will go to 9% if it doesn’t. We should know for sure probably by 2/13 approx
Was considering it as a replacement for my STT-D, agree with you that it is likely going to be called.
Will try Schwab tomorrow and see how it will be priced.
The STT-I rate has been set at 6.7%. First call date / reset rate date is 3/15/29. Schwab does not have it available yet.
IBKR trading it and range so far $100-$102.45
Is 6.70% now the going rate for a Baa1/BBB Too Big To Fail financial institution???? It seems pretty high to me….. This may sound like a silly comparison, but given industrials normally trade higher than financials, then all of a sudden, SLMNP seems cheap to me even at its last trade of only 2 shares at $850…. At $850 its current yield is 7.06% I tend to value the put just 2 points below this price quite highly, so the other hair on it such as being on the expert’s market doesn’t bother me, given its guarantor, LyondellBasell, is rated Baa2/BBB…. Trouble is, not many brokers allow you to try to buy.
bought a few shares of MFAN this morning(mfa bond) at 25.1
and a few O-a at 24.98
bob , I can’t find any OpA ; O doesn’t have any outstanding preferred stock per Quantum ? is it a new issue perhaps?
Ted, as mentioned here previously, this is the old SRC-A, now part of O. Symbol on Fido is OPR.
ted,
It’s the old SRC-A which, when O acquired SRC, converted to O-. Like TY-, there’s no letter after the dash. So the symbol is O-, not O-A.
At Fido, the symbol is OPR, at ETrade I think it’s O.PR
Atlanticus Announces Offering of Senior Notes
ATLANTA, Jan. 24, 2024 (GLOBE NEWSWIRE) — Atlanticus Holdings Corporation (ATLC) (“Atlanticus,” “the Company”, “we,” “our” or “us”), a financial technology company that enables its bank, retail and healthcare partners to offer more inclusive financial services to millions of everyday Americans, today announced it has commenced an underwritten registered public offering (the “Offering”) of Senior Notes due 2029 (the “Notes”). The Company expects to grant the underwriters a 30-day option to purchase additional Notes in connection with the Offering.
The Company expects to use the net proceeds of this Offering to redeem a portion of the Class B preferred units issued by one of the Company’s subsidiaries and/or for general corporate purposes.
In connection with the Offering, the Company will apply to list the Notes on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “ATLCZ.” If approved for listing, trading on Nasdaq is expected to commence within 30 business days after the Notes are first issued.
The Company and this issuance of Notes received an “A” rating from Egan-Jones Ratings Company, an independent, unaffiliated rating agency. Ratings are not a recommendation to purchase, hold or sell Notes, inasmuch as the ratings do not comment as to market price or suitability for a particular investor. The ratings are based upon current information furnished to the rating agency by the Company and information obtained by the rating agency from other sources. The ratings are only accurate as of the date thereof and may be changed, superseded or withdrawn as a result of changes in, or unavailability of, such information, and therefore a prospective purchaser should check the current ratings before purchasing the Notes. Each rating should be evaluated independently of any other rating.
B. Riley Securities, Inc., Janney Montgomery Scott LLC, Ladenburg Thalmann & Co. Inc., William Blair & Co., L.L.C., and BTIG, LLC are acting as book-running managers for this Offering. Brownstone Investment Group, LLC is acting as co-manager for this Offering.
The Offering of these Notes is being made pursuant to an effective shelf registration statement on Form S-3, which was initially filed with the Securities and Exchange Commission (the “SEC”) on May 6, 2021 and declared effective by the SEC on May 13, 2021. The Offering will be made only by means of a prospectus and prospectus supplement. A copy of the prospectus and prospectus supplement relating to these securities may be obtained, when available, from the website of the SEC at http://www.sec.gov or by contacting: B. Riley Securities, Inc., 1300 17th Street North, Suite 1300, Arlington, Virginia 22209, Attn: Prospectus Department, Email: prospectuses@brileyfin.com, Telephone: (703) 312-9580.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Interesting they are coming out with this before their March quarterly report.
https://www.quantumonline.com/search.cfm?tickersymbol=ATLC&sopt=symbol
Specialty is consumer loans also credit card services and loans to independent auto dealers and auto finance companies. Both in the US and the United Kingdom.
I like Private’s comment about his dealings with clients in the far East. First ask yourself what could go wrong here then ask what the yield the note is going to be priced at.
The Atlanticus series B preferred shares aren’t callable until June 2026? There is a provisions for earlier redemption if the shares are delisted. A majority of the shares of this company are owned by one family and they also have interests in the financial companies that loan money to the corporation. The company had a $50M private placement of company stock last December. I guess that I viewed the control as insurance of future payment on their shares, but you never know.
I have a small number of the B series shares. I wouldn’t complain if they found a way to call them as long as I get $25 plus accrued interest.
It’s a different Series B issue, not the $25 variety
We intend to use the net proceeds from this offering to redeem a portion of the $100.5 million principal amount of Class B preferred units issued by one of our subsidiaries and/or for general corporate purposes. The Class B preferred units carry a 16% preferred return payable quarterly, with up to 6 percentage points of the preferred return to be paid through the issuance of additional units or cash, at our election. The units have both call and put rights and also are subject to various covenants including a minimum book value, which if not satisfied, could allow for the securities to be put back to the subsidiary. A holder of the Class B Preferred Units may, at its election, require the subsidiary to redeem part or all of such holder’s Class B preferred units for cash on October 14, 2024. We have the right to redeem the Class B preferred units at any time with notice.
Thanks for clarifying 2whiteroses, I prefer to keep the $25 preferred.
Thanks much NewToThis2015!!
Not sure if this should be here or in sandbox…but for those interested in NGL preferreds, whose dividends have been suspended since 6/21, but market price suggests there are buyers betting on re-instatement….new notes coming to market, while calling some 6.125% notes maturing in ’25 and 7.5% notes maturing ’26
https://www.businesswire.com/news/home/20240123093236/en/
I received a notice from Fidelity today that as of 4/24 they’re calling their 7.5% bonds maturing 4/26. No idea about the new rates and how that might affect the preferreds.
Full disclosure: I own all of 2 of the 7.5% bonds (I think thanks to Jeremy LaKosh? of the other site) and have held onto a remaining 25 sh of the NGL-B, mostly out of curiosity and a weakness for tiny amounts of high stakes gambling.
Anyone see a reason what BWBBP is suddenly down 5.6%? Dropped from $19.20 to $18.82 in an instant. Common is down slightly, 0.50%. Perhaps a buying opportunity if someone fat fingered a trade.
Back in Nov BWBBP was $16 and lower before that. That was a bargain. Current price drop might be profit taking. Still might be a good deal at a 7+% dividend but I sold.
I think it’s just thinly traded. When the volume is 3X average, you’re going to see a price move.
Midday updates…
MMFs Today:
VSUXX 5.30%
VMRXX 5.29%
VMFXX 5.28%
SWVXX 5.22%
SNSXX 5.04%
SNOXX 5.03%
SPAXX 4.98%
Other Data…
10yr ~ still bubbling up, 4.15%
CME Fedwatch Tool ~ March rate cut declining, 42%
30yr Fixed Mortgage ~ rising, 6.92% today
DXY ~ 6 week high, $103.7
Biggest Dow Loser ~ MMM ~ down 12%
BTC ~ 20% drop over 12 days
Loudest Barking Dogs of Dow Yields ~ VZ 6.8%, 3M 5.6%, DOW 5.2%
China ~ pumping 278B into markets for support
Realty Income Preferred incoming…
https://www.sec.gov/Archives/edgar/data/726728/000110465924005341/tm243768d2_8a12b.htm
Thanks Justin.
Justin:
This is just Realty Income (O) assuming the 6.9M shares of the 6% SRC+A preferred due to the O-SRC merger closing yesterday.
So it may be “incoming” but the SRC+A is “outgoing”.
I expect O to redeem this preferred by year end if the 10-year hangs around 4%. As you can see from that SEC filing, Realty Income has not issued a new preferred since 2012. They aren’t fans any longer of this type of financing….but love to issue low cost debt:
SAN DIEGO, Jan. 8, 2024 /PRNewswire/ — Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company®, today announced the pricing of a public offering of $450 million of 4.750% senior unsecured notes due February 15, 2029 (the “2029 Notes”), and $800 million of 5.125% senior unsecured notes due February 15, 2034 (the “2034 Notes” and, together with the 2029 Notes, the “notes”). The public offering price for the 2029 Notes was 99.225% of the principal amount for an effective semi-annual yield to maturity of 4.923%, and the public offering price for the 2034 Notes was 98.910% of the principal amount for an effective semi-annual yield to maturity of 5.265%. Combined, the notes have a weighted average tenor of approximately 8.3 years, a weighted average semi-annual yield to maturity of 5.142%, and weighted average coupon rate of 4.990%.
Looks like the symbol is going to be just O- or whatever version of that your broker uses – https://www.realtyincome.com/investors/press-releases/realty-income-closes-merger-spirit-realty-capital
SAN DIEGO, Jan. 23, 2024 /PRNewswire/ — Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company®, has closed on the previously announced merger with Spirit Realty Capital, Inc. (“Spirit”, NYSE: SRC) in an all-stock transaction. The common stock of the combined company will trade under the symbol “O” on the New York Stock Exchange, beginning today. The closing follows the satisfaction of all conditions to the closing of the merger, including receipt of approval by Spirit stockholders on January 19, 2024. Under the terms of the merger agreement, at the closing of the merger, Spirit common stockholders were entitled to receive, for each share of Spirit common stock held, 0.762 shares of Realty Income common stock. At the closing of the merger, all of Spirit’s outstanding shares of Series A Cumulative Redeemable Preferred Stock were also exchanged for shares of Realty Income Series A Cumulative Redeemable Preferred Stock, which will trade under the symbol “O PR” on the New York Stock Exchange following the closing. The final day of trading for Spirit’s common and preferred stock on the New York Stock Exchange was January 22, 2024.
I see a quote on Fido at 24.01-24.26
AG Mortgage Investment Trust, Inc.
Senior Notes Due 2029 (MITN) incoming
https://www.sec.gov/Archives/edgar/data/1514281/000110465924005759/tm243709d1_424b5.htm
Thanks J
MS-E question here. Just got my dividend back on 1/16 in overnight but an adjustment higher was made overnight last night (ETRADE). I know there was talk around here of them fixing at 7.1% back in October so I adjusted my expectations from 44.5c to 45.52c/share. Looks like the adjustment came in at a slight bit over 46c/share (46.015c). Looks like that is 7.365% yield at par. Trying to adjust my spreadsheet on what the exact amount should be. Ideas?
$0.4453125 per quarter; same as the fixed rate before the scheduled but aborted float. Rate is fixed and will not float, but issue has been callable since 10/15/23.
yazzer and OldmanRB,
For the most recent div, Morgan did declare a $0.455208 rate:
https://www.morganstanley.com/press-releases/morgan-stanley-declares-dividends-on-its-preferred-stock-2023
I have an idea why. According to the IPO prospectus (p. S-15):
1) During the fixed div period, the rate shall be calculated based “on the basis of a 360-day year consisting of twelve 30-day months.”
2) During the floating rate period, the rate “will be computed on the basis of a 360-day year and the actual number of days elapsed in the dividend period. ”
I did the math:
1) $0.4453125 = 7.125% * $25 par / 360 days * 90 days
2) $0.455208 = 7.125% * $25 par / 360 days * 92 days
Most recent div pay date = 1/16/2024
Prior div pay date = 10/16/2023
From 10/16/2023 to 1/16/2024 = 92 days.
It appears that as of the Oct 15, 2023 floating date, they kept the coupon the same, but they did switch how they calculated the rate so now it’s based on the # of days in the period.
From the IPO prospectus, page S-15:
Dividends payable on the Series E Preferred Stock for any dividend period during the fixed rate period will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends payable on the Series E Preferred Stock for any dividend period during the floating rate period will be computed on the basis of a 360-day year and the actual number of days elapsed in the dividend period.
mbg – thanks – you figured out the mystery!
as a follow-on, I guess the avg period will be 91 days going forward so a slight adjustment higher that the 90-day rate…I think it’s $0.450260, but may adjust by a day one way or the other.
You bet, yazzer. That was a nice catch! 🙂 I haven’t asked MS to verify, but it sure seems like it’s what they’ve done.
For your spreadsheet, I match you: 7.125% X 25 par / 360 days x 91 days = $0.45026.
This year is a leap year, so the next div will have 1 more day than usual for the quarter. From 1/16/24 to 4/16/24 = 91 days this year.
Nice! Another way to look at it is, if you extrapolate the 7.125% for 360 days out to a 365-day year, the avg quarterly payment is about $0.4515 or $1.806/ year which equates to 7.224% yield at par. Using that 360-day metric gives about 1.37% more income versus the 365-day year. Every little bit counts!
yazzer, I’m not sure that’s accurate. I could be wrong, but I think $1.78125 will be the annual amount each year.
Some quarters will have fewer than 90 days and for those quarters, the div rate will be less than $0.4453125.
Other quarters will have more than 90 days and for those quarters, the div rate will be more than $0.44531245 (e.g., $0.45026).
But when we add up those 4 quarterly divs, I THINK they should total $1.78125. Quarterly coupons will sometimes be slightly different than 7.125% but our annual divs will still end up being $1.78125. I hope I’m wrong, but I think that’s our annual amount, regardless of how we calculate it.
Another way I look at this:
1) 7.125% * 25 par / 360 days * 90 days * 4 quarters = $1.71825
2) 7.125% * 25 par / 365 days * 91.25 days * 4 quarters = $1.71825
In 2), I multiplied by 91.25 days because 365 days / 4 divs = 91.25 days.
Well done MBG. You are correct on the quarterly computation and that the annual dividend remains unchanged at 1.78125. With current rates, I’m guessing this issue will not be called for a while. The last MS issue was in the summer of 2022, I think, with a coupon at par of 6.5%. I believe rates were considerably lower then (i.e., 10-year treasury was low 3s, I think). MS could not take this issue out at a low enough rate sufficient to make it worth its while. Any thoughts on this guess?
Thanks Oldman.
To me your reasoning makes sense …unless they could get a sufficiently lower rate by issuing debt instead of a new preferred? For instance, this month ET issued some Notes at 5.55%, 5.95% and 8% coupons in order to redeem ET-C and ET-D (coupons >10%) and ET-E, which was to begin floating at >10% beginning this May.
I figure MS should be able to issue new debt at even better rates than ETs new note with 5.55%. That’s sufficiently better than MS-Es 7.125%.
TRIN is down over 3% this morning on about 3 times the volume. Haven’t had a chance to look for news. Anyone see any news to cause this.
Charles, there is a rumor that the company will be going into the market to raise more money (shopping the idea around) and this may result in a secondary of the equity or other forms of financing. I have NOT substantiated this with anyone that is close to the company, only a reply from one of my old colleagues I am still in touch with. Stay Tuned
Thanks AB, seems someone over on SA called IR and was told they didn’t know either except it was a larger holder of the stock who seemed to have did a dump. Didn’t seem to affect the preferred. I had been following it thinking it was a good to park some money for 1yr.
Trinl is due in a year and trades over par.
TRINL’s redemption value is $25.
It pays about $0.44 a quarter, or about 1/2 cent a day.
Last Ex date was Nov 30 (for Dec. 15 pay) so we are about halfway to the next date.
It was trading late last week in the mid $25.2x’s – although it spiked up to $25.4 today.
so, it doesn’t seem terribly over priced to me – maybe a few cents.
Buy, maybe I am think about it wrong.
For those open to MYGAs, blueprintincome.com shows a 5-year MYGA from Wichita National for 6.5%. I don’t know if Wichita National is having some kind of issues; it’s shown as B+ from AM Best, which is not fantastic but not terrible.
Does anyone here have experience with MYGAs? I got asked about them late last week and I didn’t even know what they were (which should surprise nobody).
In my understanding, MYGAs are an insurance company’s version of a CD. They pay a fixed rate for a fixed term. You get your principal and interest back at the end of the term. The rates are a little higher now than most CDs. The sweet spot seems to be 3-5 years. A real tax benefit is, unlike CDs where you have to pay taxes each year during the term, MYGA interest is deferred until maturity. I hate paying taxes on CD income that I have earned but not received as is the case with multi-year CDs.
You can also roll over MYGAs without paying taxes at the time of the rollover.
Again, the above is my understanding of MYGAs. I’m always open to correction from more knowledgeable folks.
good points, I wholesaled ins for years including fixed/variable life products, annuity products, LTC, DI etc. among other ins experiences prior to retiring. I no longer keep E&O ins or my license up so as far as advice, I can only steer folks and like stocks/pfds etc DYODD; That said, here is a great site w lots of info and you can even do rough quotes. States also provide protection somewhat on annuities in the event of defaults.
Like mmkt, pfd/bb’s, CDs etc Annuities now offer some good ‘insurance co guaranteed’ rates (no govt/FDIC/SPIC type guarantee/some state guarantee) . There are features like early access, inflation protection riders that reduce returns somewhat but are interesting, you can index to S&P and other indexes for some extra return possibilities. Personally I would not go below A or A+ rates co’s, names you know. Some you may recognize from pfd stocks like Athene, PRU, others are mutual companies like Nationwide…
Most advisors have ins depts to guide you and some do it as part of your assets under mgmt fees, others do make a commission but they have to disclose..like Janney, MSSB, etc. who I used to work with. They can ‘shop’ for the best rate for you. Always someone you trust or are referred to by a friend/trusted person w good experience. Anyway sorry to go on, here is the site w good info. https://www.blueprintincome.com/resources/education/fixed-annuities
I am not averse to an annuity in a mix for guaranteed income but as always depends on need. I ran a quote for the heck of it on a Single Premium Immediate Annuity w 100k payment one time, starting in a month for PA no period certain( if you die in month 2 bye to the money, if you live 30yrs, it keeps going ) and Nationwide A+ came up providing guaranteed (by Natw) 667/month for life for a 65yr old Female. Maybe?? not bad for part of your wealth to supplement a SS ck and/or pension or pfd/bb/cd income.
Had to put my ins hat on for a minute a good exercise for me anyway since 2014 when I retired. Bea
(you will also see ads to sell your life policy now ‘you don’t need’, another thing that has ‘come back’ since rates are up. People who have health issues usually get the best returns on these via an underwriting and actuarial review of life expectancy and values in policies or remaining term on a term ins plan. https://www.investopedia.com/terms/v/viaticalsettlement.asp)
Hi Bea, thank you for the info. What if you had a rider for the monthly/yearly payment to index the income with inflation if your starting point was $667?
All the very best, A
hi AB! well.. when you add riders you give up something( income) and it really does come into getting a specialist. Or googling around I guess…https://www.stantheannuityman.com/learn/can-inflation-be-addressed-using-income-riders
I usually passed the more complicated requests to ‘the annuity ‘ person to make sure all aspects were addressed for the client, risk tolerance etc. for that sale. I was more involved w High NW life/estate planning etc. I always had the best experiences with Janney formerly Parker/Hunter and Morgan Stanley Smith Barney folk in ‘doing what was best’ for their clients. Lots to know and learn! take care.
B
Thanks, Bea…. I’ve always been curious about those sell your policy ads… I keep guessing they rip your eyes out vs policy value at my advanced age but have never wanted to give up all kinds of personal info to strangers just to find out.
Other problem to me is annuities always have far too many options attached that it’s impossible for a normal human being to ever understand what they end up buying – so I don’t.
yes the better results for life insurance policy sales come from seriously ill people w life expectancy in single digits after underwriting, which involves a simple form and HIPAA release and they go for all your health/RX history. I think in my career we were successful w about 5 or so ‘getting thru’ and paying the people- Most were HNW w temp cash flow problems and other planning in place who didnt want to sell stock for cap gain reasons or farmland/real estate etc. The commercials to ‘sell your policy’ are probably mostly fishing expeditions to get a few ‘good ones’ like the ‘were you injured in a car accident’ ones. Looking for a few good men/women!! lol.
As far as annuities, the simple ones give the best returns and the riders knock down returns and payouts for monthly income. The newer ones offer LTC riders which may be of interest to some. A good professional that is trusted and up to date on current plans might be worth a meeting. I think meeting with an Insurance Agent falls under going to the Dentist in popularity in the ‘appointment’ world! oh well, back to my gold miners! lol. Bea
Good thoughts Bea on insurance,
MYGA’s are cool. Basically like a term CD wrapped in a tax deferred blanket.
Here are the top reasons MYGA’s are hated.
1. Surrender charge – I never sold an MYGA that had a surrender charge longer than the rate guarantee.
2. MVA – This feature lets the insurance company pass some risk over to the buyer. Usually when rates go down the MVA is positive. When rates go up, it will most likely be a negative number.
3. Surrender free withdrawals – There are many options for W/D prior to annuitization. The more options the better here when buying. At the least, I would get IO payments if nothing else.
These MYGA’s are fine just stick to the basics and take the surrender free withdrawals as needed. When your term is up, just move it via 1035 into something else.
The people who lose money say they don’t need the money. They buy the product then they’ll say. “Oh I need money for this and that.” Well, enjoy eating that surrender charge/negative MVA.
The other scenario is the rep just suckers the customers into the product that pays the best for the rep! Usually the higher the commish, the customer loses as the product will be most likely saddled with restrictions.
Obviously, this is not an exhaustive list of reasons to buy/not nuy.
YMMV DYODD
great points, a lot to consider NWGG !
Sunoco getting hitched to NuStar
https://www.sunocolp.com/press-release/item/sunoco-lp-to-acquire-nustar-energy-l.p.-in-transaction-valued-at-7.3-billion-2024
Thanks NWGG
Sunoco = Baa3/BBB credit
Do you think they will call NSS ?
Thanks
NSS and the other issues (NS-A, NS-B, NS-C) all look to be getting redeemed. NSS holders going to take a hair cut today as it closed on Friday at $26.66. Most likely trading around $25.50 at the open.
From the press release:
Sunoco has secured a $1.6 billion 364-day bridge term loan to refinance NuStar’s Series A, B and C Preferred Units, Subordinated Notes, Revolving Credit Facility, and Receivables Financing Agreement.
Yes
The announcement says they will call all the Preferreds and the Notes and they have lined up financing to do so.
Leonard; the only language I can find is “a bridge loan to refinance the NS preferred Series and Notes ; NS A,B,C and NSS. ” doesn’t say redeem ., but that makes more sense than refinancing these expensive floaters; and the units are all priced like that (stripped price close to 25) ; with that in mind I added to B and bot into NSS ; worst case scenario ; you earn 12% for 5 weeks ;
I think your math is off, Ted…. Assuming you’re talking about NSS, I don’t think you come close to achieving a 12% annualized yield if you bot NSS at 25.35 or higher today for a worst case 5 week period… In fact, I’d venture a guess you’d essentially break even at best if called on 2/26 and you paid 25.35 or higher.
NSS, NS-A, NS-B and NS-C
For those following the NuStar preferreds and NSS, it looks as though today’s 8k filing eliminates questionmarks as to timing of redemption of all these issues – There will be NO REDEMPTIONS PRIOR to the Effective Date of the deal…. Of course nobody knows for sure when the Effective Date will be but they still aim for the second quarter.
https://investor.nustarenergy.com/node/21126/html Agreement and Plan of Merger, Section 5.20 Redemption of Partnership Preferred Units and Subordinated Notes P 80
Upon the request of Parent, the Partnership shall prepare a notice of redemption in respect of the redemption of (i) all outstanding Partnership Preferred Units (the “Preferred Redemption”) in accordance with the Existing Partnership Agreement and (ii) all of the outstanding principal amount of the Subordinated Notes in accordance with the Subordinated Notes Indenture (the “Subordinated Notes Redemption” and, together with the Preferred Redemptions, the “Redemptions”), and in form and substance (including with respect to the redemption date specified therein, which redemption date shall in no event be prior to the Effective Time) reasonably acceptable to Parent and use reasonable best efforts to take all other actions reasonable, customary or necessary to prepare for the Redemptions following the Effective Time in accordance with the Existing Partnership Agreement or Subordinated Notes Indenture, as applicable; provided, that no notice of redemption or similar notice shall be required to be issued by the Partnership or any of its affiliates or Subsidiaries until following the Effective Time, and in no event shall the Partnership or any of its affiliates be required to cause the Redemptions to occur prior to the Effective Time or to commit the Redemptions to occur (or take any action which requires any Redemption to occur) prior to the Effective Time. All documentation regarding the foregoing shall be subject to the review and approval (not to be unreasonably withheld, conditioned or delayed) of Parent. Parent shall provide (or cause to be provided) all funds for the Redemptions as required by the Redemptions.
Pursuant to this clause, it appears they will not even issue the notice of redemption until the deal closes, so all the securities will survive for at least 30 days after the closing:
no notice of redemption or similar notice shall be required to be issued by the Partnership or any of its affiliates or Subsidiaries until following the Effective Time
2wr—I noticed conflicting data from Sunoco – one said they remain outstanding and one piece said to be ‘refinanced’.
Referring to the preferreds only, I saw that too, Tim, and wondered why it differed from the original info from yesterday and included nothing about NSS subordinated note.. So I looked further and found the quoted language….. I have no explanation for what’s said other than maybe technically they have to reissue the preferreds under the new name first before redeeming them after the Effective date.
I dont think both statements are in conflict with each other. They will likely remain outstanding until closing of acquisition, and then get dealt with quickly from the credit strength of Sunoco. Most acquisitions the acquiring company doesnt want or even allow anything more than financial caretaking until consummation. It seems pretty clear the pocket pen protecting bean counting nerds have shown one of the clear easy money benefits to merger is knocking these out.
This is one on your specialities, 2WR. Doing the math and guesswork to see if and how much you can arbitrate out some money before the merger gets completed in relation to current pricing of issues.
Careful, Grid – I hear trading while on a black diamond course can be dangerous to your health.
I think Grid has it right
-Nustar can’t redeem before closing (and couldn’t anyway unless it magically got a bunch of cash), but can create the documents to redeem to be ready to redeem ASAP after closing
-SUN can’t redeem Nustar securities because these aren’t SUN securities.
So, as I read it, everybody will just be waiting for closing (Effective Time), then the Nustar preferreds will be called and NSS will be refinanced.
2WR…… I read this several times. That is one hard logic to follow! Must have been written by lawyers…….. I own a ton of the the three Nustar preferreds. I would not be surprised if the “Effective Time” slips a quarter or so. You never know if somebody (an activist shareholder with some leverage?) will raise issues over this that will take some time to resolve. Maybe I will get more than two quarters of dividends before they get redeemed, which seems to be what will happen after the deal goes through. The Sonoco release talks about “refinancing” these, but Nustar states “redemption”. Confusing………
I think it all makes sense, dj. From Nustar’s perspecitve, their preferreds will be redeemed… From Sunoco’s, their refinancing will redeem Nustar’s preferreds… I agree with Grid – it can all make sense from the point of view of crossing all the T’s and dotting all the I’s in the written language… It all comes down to what seems to be the truth that redemptions will not and cannot officially occur until after the Effective date and Nustar has its new corporate identity under the Sunoco umbrella…. And as far as an activist delaying the closing, I’m more suspicious that all regulatory approvals that need doing before they can have an Effective date might possibly be a cause of delay than activist activity
2WR Agree the regulators may also throw a wrench into the gears, but I suspect it will be worked through. Sunoco has been one boring company over the years I have owned them. It just took a few read throughs to get it to make sense. It will not bother me at all to get a few more quarters of dividends before they get redeemed! Not looking forward to finding suitable replacements as I have owned these things since 2018.
RILY and related issues – On Bloomberg:
SEC Probes B. Riley Deals With Client Tied to Failed Hedge Fund – Jan 22
https://archive.ph/IAR28
See post on the stock page for more info.
B. Riley Financial, Inc. has issued a press release in response 👀
https://ir.brileyfin.com/2024-01-22-B-Riley-Financial-Issues-Statement
January 22, 2024 at 07:46 am EST
Sunoco LP (NYSE: SUN) (“Sunoco” or the “Partnership”) and NuStar Energy L.P. (NYSE: NS) (“NuStar”) announced today that the parties have entered into a definitive agreement whereby Sunoco will acquire NuStar in an all-equity transaction valued at approximately $7.3 billion, including assumed debt.
https://www.businesswire.com/news/home/20240122768145/en/
…Under the terms of the agreement, NuStar common unitholders will receive 0.400 Sunoco common units for each NuStar common unit, implying a 24% premium based on the 30-day VWAP’s of both NuStar and Sunoco as of January 19, 2024. Sunoco has secured a $1.6 billion 364-day bridge term loan to refinance NuStar’s Series A, B and C Preferred Units, Subordinated Notes, Revolving Credit Facility, and Receivables Financing Agreement.
The transaction has been unanimously approved by the board of directors of both companies and is expected to close in the second quarter of 2024 upon the satisfaction of closing conditions, including approval by NuStar’s unitholders and customary regulatory approvals.1…
Amazing.
I’ve followed nustar for over a decade. Good company, but way too much debt. I think it was that navigator acquisurij that did them in. Great purchase, but it also came with more leverage.
I am going to assume this is a non tax event for the common shares, as the founder has a massive allocation.
Also a good reminder to not get greedy with prefs priced over par past call date.
Fabrib, thanks!
I saw this and was able to sell my NSS at 26.00. Good thing – the bid’s already at 25.75. At 26.00, and assuming a 6/30/24 call date, I calculated a YTC of just 3.54%.
If the deal does close in Q2 then for my NS-C position, I’ll get at least one (ex-date ~Feb 28) and maybe a 2nd div (~May 28 ex-date) out of it. Those are ~70-80 cent divs. Depending on where it trades, I might be better off holding to redemption.
NWGG, thank you as well.
Not seeing this early enough to act on the sell side, I’ve bot more instead of selling any. Bot at a shade under 25.42…. At this price, this becomes a case of if I’m wrong, I’ll probably do better than I thought… I figured the worst case, and unlikely, scenario is NSS gets called on its next coupon payment date of 4/15/24. If they could close this deal by that time, it would be a miraculously fast closing. With NSS is now paying coupon of 12.312% so YTC assuming 4/15/24 and YTpossibleC on 4/15 @ 25.42 purchase = 6.11%. Every day NSS stays outstanding beyond 4/15, I do better than 6.11% yield for short term holding period. I’ll take that, especially when there seems to be no way the worst case call possibility can happen. I would think a call before closing would now be completely off the table. A case of “famous last words?” Who knows, guess I’ll find out.
That math makes sense to me. Sunoco has the $ to repay the prefs, not Nustar. So the biggest risk is that Sunoco finds some iriegularities as part of the deal, and Nustar’s reputation is tarnished. Unlikely… but still good to be aware of..
“Sunoco has secured a $1.6 billion 364-day bridge term loan to refinance NuStar’s Series A, B and C Preferred Units, Subordinated Notes, Revolving Credit Facility, and Receivables Financing Agreement.”
BTW, I continue to nibble at GJH below $9, still massive disconnect with the bonds. Now that is a risk I am not super well versed in… if TDS can’t find a buyer, how bad is that for the debt?
Hi 2WR,
I actually bought some NSS at $25.35-38 this morning figuring similarly. Not a huge return, but good place to park a few shekels
you got pretty lucky, P. I started at the open at 25.32 so missed calling the bottom when you did (YAY, you!) and then kept moving it up and hung around 25.37 for awhile without an execution…. Once I started looking at it even more defensively, i.e., yield to next coupon as the worst case, I decided the offered side worked for me at 24.42 after missing again up to 25.39. I ended up buying at 25.4152 and 25.42 a couple of times both and decided not to go higher.. I already have a decent chunk with a good cost, but sure wasn’t expecting this Sunoco deal
Wouldn’t you think being able to close in the 2nd quarter is an aggressive timetable?
Any chance this hits some snag due to regulators and anti-monopoloy? Just saying as I wouldn’t have thought Activision acquisition would have been hampered, and that dragged on for quite some time before some oil the apporoval rails (my opinion). And iRobot acquisition didn’t seem like a big deal but EU is crapping on that acquisition by Amazon. And then Spirit merger with JetBlue gets shot down. Regulators say it will provide better low cost air fare options – but not if Spirit goes BK (which is a good chance of occuring). Seems this would send up some type of regulator review, but I could be dead wrong.
IMHO it’s too small a deal to have anti-monopoly connotations, but you never know…. so far it’s about 3 months and counting on XOM/PXD though but that one does have anti-monopoly concerns already expressed.. That one also has end of 2nd quarter as target date and they announced on October 11, so it’s a good one to monitor for any unforeseen circumstances that may apply to NSS as well..
Thanks Fabrib
Lux Urban Hotels
For those who might have been tempted into buying a new 13% pfd or the equity( they have been hitting all the microcap conferences). I was suspicious that they had to come out with such an astronomical rate and that kept me away.
Bleeker St is short the stock and their report and it is pretty damning. The prf is down. Lux is crying inaccuracies and misleading. I don’t know but ii is quite interesting reading if even 25% is accurate. love the catchy title.
https://www.bleeckerstreetresearch.com/research/luxurban-hotels-luxh-the-bed-sheets-should-be-made-out-of-red-flags
Rvert, the demand from investors is up with the thinking that the feds will be cutting rates and this has driven the prices up with people trying to capture yield. The market has believed this so much that the asking price for preferred’s went up and the yield for 10 T bills went down. The market for new issues dried up then all of a sudden a lot of ETD started coming to market with the drop in interest rates. I think people really need to be cautious chasing yield right now especially with lower quality companies. They could be putting their principal at risk.
Interesting link, thank you. One of the commenters on this very board seemed nervous about LuxUrban way back in November 2023. (“I love high coupons but I prefer the speed of the Pick-5 with the one-dollar Xtra option when I fear a binary outcome.”) Maybe there’s something to that leopard / spot cliche after all. —
7 thoughts on “Headlines of Interest”
https://innovativeincomeinvestor.com/headlines-of-interest-239/
“As far as not paying rent, LuxUrban in its earlier incarnation as CorpHousing Group got into some litigation over unpaid rents. Its latest press release says it has substantially wound down its legacy business.
Black Spruce Sues CorpHousing Group For Nearly $1M In Unpaid Rent On Short-Term Rentals
https://www.bisnow.com/new-york/news/multifamily/black-spruce-sues-corphousing-group-for-17m-in-unpaid-nyc-apartment-rents-116985
“LuxUrban Hotels went public under its former name CorpHousing Group earlier this year…CorpHousing Group was founded in 2017 and amassed a national portfolio of short-term rental units in apartment buildings…
“Before going public, the company had been sued by dozens of plaintiffs in multiple states alleging the company hadn’t paid rent for short-term rental units, entire hotels, furniture it had leased or wages of its own employees, Bisnow previously reported.”
JMO. DYODD.
Thanks Rvert
anyone know when Et-I goes ex-dividend?
I guess this will be last man standing once Et calls et-e in may
If past is prologue, it should be announced early this week for an early Feb ex-div.
FYI
AGM-C will float off 3-mo SOFR (+ tenor adj.). Unless redeemed, of course.
Reply from Farmer Mac’s IR Department, about AGM-C’s floating rate (beg. 7/18/2024):
Hi Mike, thanks for reaching out.
Farmer Mac plans to replace the LIBOR index with Term SOFR – Below is the notification that was posted on our website –
***NOTICE TO CUSTODIANS AND HOLDERS OF FARMER MAC LIBOR INDEXED FLOATING RATE SECURITIES ***
Following the approach outlined by the Federal Reserve Board’s final rule (from December 2022) that implements the Adjustable Interest Rate (LIBOR) Act and the Federal Reserve Board’s implementing rule (collectively, “the LIBOR Act”), Farmer Mac plans to replace the LIBOR index with Term Secured Overnight Financing Rate (“Term SOFR”), published by CME Group Benchmark Administration, Ltd., plus a spread adjustment based on the tenor of the interest rate period for the Series C Preferred Stock (CUSIP – 313148876) and the below CUSIPs that did not adhere to the consent solicitation – Link: https://www.farmermac.com/investors/debt-securities/
Let me know if you have any additional questions.
Thanks!
Jalpa
Jalpa Nazareth
Senior Director – Investor Relations & Finance Strategy
Phone: 202.872.5570
Ah, you blew my cover, mbg. ha. This is another one I’ve begun to take a position in. I had found that link earlier this week to be sure of the adoption of SOFR already.. Got started yesterday at 24.75..
I also noticed that AGM shows up in the Agency category on Fido’s Fixed Income sheets but it apparently does not actually have the AAA/AA+ rating that other agency debt does. AGM-C is of course a preferred, not debt so would be considered a notch lower, but still agency paper. The best yielding bond Fido shows is YTM 5.14 for a bond with a 2032 maturity cusip 31422xxy3
Do you think AGM-C will be called?
What I like about these types of near date F/F issues right now trading at a discount is that you’re paid to be wrong…. I buy under the premise that they will be called… If I’m right, I get a great YTC. If I’m wrong, I’ll do better than original expectation. If I remember correctly, on a current yield basis this one right now trades equivalently to its fixed rate perpetuals. SOFR would have to go down to 2.48% by July for AGM-C to NOT adjust upward. So if rates go dramatically higher, the incentive to call increases. If they go down there’s still theoretical incentive to call… So imho, you’re protected no matter what happens with call perhaps being the worst scenario. However, if AGM-C gets called away, you have an acceptable yield for holding period for solace.
Good catch, finding that announcement, 2wr! I too got some (today) at 24.75. And thanks for the YTC comparison to ‘similar’ debt.
David, that’s the question, will they call it? I’ve no idea, but to me it’s reasonable to think there’s a good chance. Based on recent 3-mo SOFR rates and the floating spread, the floating coupon would jump from 6% to almost 8.9%. Given 2wr’s find (5.14% YTM for agency debt) on Fido, AGM may be able to refi AGM-C to new paper at less than 8%.
For those who think there’s a good chance they’ll redeem it, then YTC is relevant. It’s trading near par, so price point matters a lot for YTC. Even a few pennies difference in price will have a big change in YTC.
At my 24.75 cost today, YTC = 8.14%.
Current 24.94 ask, YTC = 6.56%. 19 cents more than 24.75 = ~1.6% less YTC.
Current 24.89 bid, YTC = 6.98%. 14 cents more than 24.75 = 1.16% less YTC.
Darn 2WR I got all excited thinking I had won the lottery. I knew I had 2 issues of AGM I have been holding for over a year. I consider them sock drawer and don’t even look at them. But they are not C
On the other hand the price I paid for them I am getting 7% yield and up almost $3.00 on my cost. I wish I had bought more.
2WR DOES THIS MEAN WE CANNOT TRADE AGM-C ON FIDELITY
Why would you think that, GMG? That’s where I bot AGM-C yesterday without any problem….. I entered my bid via Active Trader Pro
There seems to be a modest amount of trading in ECCF today under gray market ticker EPCCP – 800 shares at $24.55 reported. It’s not buyable online at Fidelity, IB, or Schwab. You might be able to call in to Schwab and buy it after they read you a disclaimer, but I haven’t tried.
10yr ~ continues slow bubble up, hit 4.154% at high, & closed at 4.144%.
Since Dec 26th low of 3.78%, has crept back up 36bp in less than a month.
Any other holders of MINDP?
Looks like they are going to miss the payment for the sixth period and we can get two directors appointed. Anybody up for it?
For those holding the preferreds or common:
Textainer Announces Date Of Special Meeting And Publication Of Its Proxy Statement To Approve Acquisition By Stonepeak
Special Meeting to Be Held on February 22, 2024
Yup, saw that… I’ve got the 232 page proxy statement on my reading list for tonight…. Tain’t going to be a best seller any time soon, but it will help me get to sleep – at least for a couple of hours……..
Air Lease Corporation (NYSE: AL) (the “Company”) announced the pricing on January 17, 2024 of its public offering of $500.0 million aggregate principal amount of 5.100% senior unsecured medium-term notes due March 1, 2029 (the “Notes”). The sale of the Notes is expected to close on January 24, 2024, subject to satisfaction of customary closing conditions.
The Notes will mature on March 1, 2029 and will bear interest at a rate of 5.100% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, commencing on September 1, 2024.
The Company intends to use the net proceeds of the offering for general corporate purposes, which may include, among other things, the purchase of commercial aircraft and the repayment of existing indebtedness.
10yr ~ slowly bubbling up, touched 4.129% before settling at 4.102%
CME Fedwatch Tool ~ March rate cut down to 51.9%
Markets ~ DJIA (-111), NASQ (-156)
30yr Fixed Mortgage ~ back up, 6.88%
Other ~ US retail sales UP, homebuilder sentiment UP, industrial production UP….Keeping pressure on FED to continue TO HOLD