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What is going on with the CHS issues?
All up big on eight to ten times normal volume.
Could not find any news.
Thank you for posting this very interesting fact about the CHS issues, I was unaware of it until I read your post. Confirmed it just now.
Would be very interested to know the reason behind this – hope someone can post information.
Don’t forget end of month as being the only culprit to blame…. Notice big volume was all at end of day and the CHS issues were not the only issues experiencing the same phenomenon – typical fund behavior…. Heck DW noticed the same end of cay pattern even happening on TVC (and TVE to a lesser degree)…
You’re probably correct on the EOM reason, 2WR. Others have mentioned several other preferred stocks having similar behavior.
Funds likely re-balancing and stuff like that.
But always nice to see pops, short lived though they may be.
I think a lot of things went crazy. I bought BHFAM a couple days ago and it jumped almost 6% today so I dumped it for a quick gain.
EZ$
Not as much pop as BHFAM, but I saw ATLCL pop at the end, up almost 4%.
It would certainly be interesting to know just how many of the Big Farmers/Customers of CHS own the preferreds and what info they get from the board vs us peons??? My point being this—CHSCL is callable in JAN/2025. There’s just no way this thing should be priced at $26.40 but yet it is!!!!!! Somebody knows something the rest of us don’t know. Do the math on it.
Chuck, are you holding it? or have you sold out?
Hello my friend Charles M. NO I will continue to hold my CHSCL till the bitter end. If they call it in JAN/25 then so be it. I find the company to be very rock solid but a little strange too. They have an issue is that is callable but they don’t seem to be interested in doing so. What that tells me as an outsider is the BIG FARMERS & BIG SHAREHOLDERS have alot of “influence” on the management and the board. I own 16,500 shares of which I was lucky enough to accumulate between $25.15 and $25.25 some time ago. I’ve spoken to a nice guy in their Treasury Dept. a couple of times (Rob Runchey) but he always says the same thing–“Its up to the board and they have not decided anything as of yet but that can always change”. Which tells you NOTHING—LOL.
Chuck, Thanks for bringing up. It is food for thought. Where do you move the money to if you sold to get the same return? I am currently averaging about a 7.3% return. One of our fellow posters ( Dick) has mentioned it would be smart to do a swap, but I can’t even think of another preferred yielding this much from a similar solid company.
I wouldn’t be worried about CHS redeeming any shares. They dont seem to have EVER redeemed a preferred issue, even though 4 of the 5 are redeemable.
check the FAQ’s
https://www.chsinc.com/about-us/owners-and-investors
TVC has a current bid of $22.47 in after hours trading. I come up with a YTM of 4.85% at that price. I sold all of my shares.
Theta mentioned June is a big month for dividends. I just noticed the CMS go X in 2 weeks. Could be some funds trying to do a little window dressing for the beginning of the next quarter.
With the market being down beginning of this week I had a few GTC bids hit.
TVC now has a bid of $22.54.
AQNB — It looks as though AQNB is benefiting from passing hte 30 day notice for 7/1 call date… That means it should be good till October, right? Next coupon ought to be about 9.86%?
I don’t think we are in the clear until later this evening, as they have a history of making announcements like this after hours.
Assuming nothing is announced today, you would think AQNB could not be redeemed until the next interest payment date on 10/1. However for AQNA they somehow managed to redeem it between payment dates. I thought you or maybe Dick Whitman had inquired with IR how this was possible and they gave a dubious response
https://seekingalpha.com/pr/19489379-algonquin-power-and-utilities-corp-announces-redemption-of-6_875-percent-fixed-to-floating
That’s true…. thanks for the reminder…. if I remember correctly (and take that with a grain of salt) I think they hung on the language, “On or after October 17, 2023, the Issuer may, at its option, on giving not more than 60 nor less than 30 days’ notice to the holders of the Notes, redeem the Notes, in whole at any time or in part from time to time on any Interest Payment Date.”
“redeem the NOTES, IN WHOLE AT ANY TIME, OR in part from time to time on any Interest Payment Date” they said allows them to call at any time if they call all, but if they call only a partial, then that, as opposed to IN WHOLE, had to be on any Interest Payment Date.
Oh right, that is unusual language in the Prospectus (might be a a Canadian thing lol) but it does make sense they could redeem it in full between payment dates. Not surprisingly, AQNB has the same language, so it can also be redeemed in full at any time with 30 days notice.
Maybe this was covered elsewhere on III:
AEL-B (now ANG-A) and ARGO-A (still same symbol) American FRR’s with HIGH resets in 9-25 selling near par. Yielding close 7%. BN is now the parent and from what I understand covered by their Insurance Group.
Will they make the call….prob not but PLEASE let them reset! Beats a one year CD.
@ JA
I had the ARGD and added some more after Brookfield took over. I prefer a bond with Brookfield’s history of hankie pankie screwin’ the preferred shareholders.
Joel-
AEL-B -> ANG-B based on the coupon.
Why is my TY/PR showing a 100% loss on Schwab today?
Yikes–it shows ok on etrade and fido where I hold it in both accounts
Schwab dials down one of my holdings each night to almost zero. I do not understand it.
Ally does this as well. The front end and back ends are not exactly agreeing all the time. Gets old after a while.
Same here; I think Schwab has a problem pricing illiquids when the market is closed. During trading hours, they somehow fix this kind of pricing problems. This happened to me a few times with AILLO.
One thing that can be frustrating at schwab is that they use multiple sources of data. For example, Streetsmart edge is run by a vendor from a totally different set of data than Schwab.com, but at the end of the day, it is somehow (usually) synced with the data that underlies Schwab.com. Very common to have data anomalies between the multiple sources.
I was able to talk to some of their developers a few years ago about some of this. A lot of what they have build up kind of violates a lot of first principles of good programming, like running multiple databases that supposedly have the same underlying data but aren’t actually synced.
Sounded to me like they spend a LOT of effort trying to band-aid all these disparate systems together. This is not an uncommon problem in companies with a lot of “legacy” systems, but it is amazingly difficult to get them to try to make fundamental changes to simplify things. Easier (in the very short run) to just “keep-a-patchin”.
In fairness, you see this in smaller companies too. Lots of software startups focus on getting “something” out the door with the intention to fix it later, but it is hard to ever “loop back” and spend resources fixing the code base rather than spending those resources getting a new product/feature launched.
As far as my luddite end user experience goes, Schwab made a big mistake. Instead of buying TD and folding it into Schwab, they should have folded Schwab into TD.
When I buy Ford (F) stock, the symbol is F. When I buy Altria, the symbol is MO. When I go to look those companies up on any site or any place, the symbols are the same. Why are they different with preferred stocks? Why are there periods between letters? Why does TY have a random minus after the letters, but somewhere else its a P? There is just a lot I don’t understand. Seems to be very needless random nonsense to describe a simple thing.
AILLO is the same at every broker, so why on a random Thursday in May, or a random Tuesday with cloudy weather is Schwab stumped by the actual closing price, whereas the rest of the random days they don’t seem to be stumped? Meanwhile, at every other broker they understand AILLO is a simple concept and just report what it is. Last night my TY- holding reflected -99.9%. Is it debilitating to me? No, Does it in the end really mean anything? No. But it does make me wonder why they can’t do this when other brokers can, and perhaps more importantly, what other things are they messing up that we don’t know about?
The older the security the more likely this is the case. The ticker symbol is not standardized among brokers and they all merged into a mess but the cusip number is always the same. Before/around the model T days they used to shout out the name of the company but as the amount of stocks increased they invented a short hand of 1 to 5 alpha symbols. So that is the start of it all.
But soon you had companies having different types of shares. F and then a preferred. So now you had to invent a new short hand for this situation. Then you toss in different exchanges and modifiers.
It is all a mess. But in the end the cusip is most likely used to be more accurate in all cases. So X.PR.Z is just a label for a cusip. A short hand every single broker/exchange can make up. No standards at all. You could create a new broker and attempt to standardize things and congratulations. You added another way of doing things tossed into the mix.
QuantumOnline – ALP-Q
S&P – ALP-Q
NYSE PR ALPPRQ
NYSE Amex p ALPpQ
Bloomberg /P ALP/PQ
Charles Schwab /PR ALP/PRQ
E-Trade p ALPpQ
Fidelity PR ALPPRQ
Google Finance – ALP-Q
JPMorgan PR ALP PRQ
LPL Financial ‘ ALP’Q
MarketWatch .PR ALP.PRQ
Quicken PR ALP PRQ
TD Ameritrade – ALP-Q
Vanguard _p ALP_pQ
Yahoo! -p ALP-pQ
Hi FC,
not to quibble, but schwab is not so pedestrian as to only use one nomenclature.
In some parts of schwab, its “/PR” as you mention (ALP/PRQ),
but on other parts of schwab its “+” (ALP+Q), while in streetsmart edge its “p” (ALPpQ). I vaguely remember that they had a fourth one (once upon a time), but I can’t remember what it was and I haven’t tripped over it in a long time.
The fun thing is that schwab can’t figure out how to translate among them.
So, for example, on streetsmart edge one of the action choices for an issue is “research on schwab.com”, but if you choose that, the system sends the symbol in the SSE format instead of the scwab.com format. That makes the research page comes back as “symbol not found”. I fought with them for years about this one. I even offered to bring some of the high school programmers we were coaching for a competition on a field trip to their office to show them how to write a translation table (I meant it as a joke, but it didn’t go over well).
Pig, I dont know if you have noticed this, but the pricing of especially illiquid OTC issues can noticeably “change” during market open and close despite no transactions occuring. For example X last trade was say $60 so that is its assigned value to your shares premarket. Then at open a bid of say $63 opens up with an ask of $65. For my brokerages I noticed the value “jumps” at market open to the higher bid. But at close with no transaction sell occuring the value reverts back to the last trade of previous day of $60.
Personally, I have learned just dont not be bothered about any goofy pricing. I have had many assigned zero values. On other end I have had situations in one of my brokerages where it showed me having multiple millions of dollars in 6 figure account. That didnt give me any false feel good feelings as I knew they just didnt know how to assign the institutional $1000 par preferreds their correct value. So if that didnt get me giddy, having a fake news zero value doesnt provide any discomfort either. As ultimately its only worth the next trade that occurs anyways and more specifically the price assigned when one sells.
re: “you see this in smaller companies too,”
and often seen in companies that acquire other companies.
Tim, pig pile, fc thanks for the replies. Balance all looks normal this morning. New to Schwab from TD, not a fan so far. It’s not a good feeling to see your account down 3K on an up day!
And yet somehow, AIC has almost daily price movements even though it is delisted…… This is also on Schwab.
Boost you must be on “Sink or Swim” ; Schwab hasn’t booted me out of Edge yet!
Boost; it looks OK on Edge. 44.99 ; very thin
Odds & Ends…
* 2yr CD ~ 949764PG3, WFC, 5.05%, pays monthly, 6/4/26, non-call, par, FDIC
* Bond ~ 125581AY4, First Citizens Bancshares, senior debt, BBB/Baa2, coupon 6%, non-call, 4/1/36, semi annual, current price 100.26, YTM & YTW = 5.967%
* Markets ~ currently, Dow (-376), S&P (-33), Nasdaq (-75)
* CME FedWatch tool ~ probability of NO RATE CHANGE
June 12 – 99%, July 31 – 89%, Sept 18 -54%
* 30yr Mortgage Rate ~ now 7.34%, up from 6.99% on May 15 (Mortgage News Daily)
* American Airlines (AAL) ~ stock nosediving 15.22%, now at $11.40
* UnitedHealth CEO, Andrew Witty comments on loss of 20 million from Medicaid rolls over the past 14 months as XLV falls 3.45% over the past week.
* AAA national gas price avg ~ down, $3.57/ga
* Dallas Stars vs Edmonton Oilers @ 7:30 tonight
2YR a smidge north of 5% now
* I had a CD mature yesterday and saw that 2 year Wells CD and rolled proceeds into it.
* Betting Dallas Stars playoff series win bets has been providing significantly higher percentage returns than my investments. I have full confidence round 3 will continue with this trend.
I put some into the 2 yr Wells and the 5.2% 18 month. JPM just called one due in Sept (5.5%). weird call given the trend here in rates.
Tim- not seeing this in new issues list
TCPC 6.95% BDC-Note coming + make whole–
https://tcpcapital.com/investor-relations/press-releases/press-release-details/2024/BlackRock-TCP-Capital-Corp.-Prices-Offering-of-6.95-Notes-due-2029/default.aspx
“The Company intends to use the net proceeds of the offering of the Notes to repay the Company’s outstanding 3.900% Notes due 2024 at or before maturity and for the temporary repayment of the Company’s other indebtedness. The Company may also invest the net proceeds of the offering of the Notes in accordance with its investment objective and for other general corporate purposes, including the payment of operating expenses.”
Redeem a 3.90% ??
Hi Gary–this is a $1000 issue which I have not ever followed–these notes will not be exchange listed.
Why does it say public offering, instead of private offering, etc?
thx
What exactly implies to you that it should be considered a private issue, not a public one?
Can trade them on IB.
Thanks- I guess that makes them listed and tradeable. Not sure why Tim said “will not be exchange listed”.
So- they already have a symbol — are they $25?
Gary–from the prospectus–Trading Market
The Notes are a new issue of securities with no established trading market. The Notes will not be listed on any securities exchange or quoted on any automated dealer quotation system. Although the underwriters have informed us that they intend to make a market in the Notes, as permitted by applicable laws and regulations, they are not obligated to do so and may discontinue any such market making activities at any time without notice. See “Underwriting.” Accordingly, we cannot assure you that a liquid market for the Notes will develop or be maintained.
Gary–they are $1000 issue.
From the prospectus
We are offering $325.0 million in aggregate principal amount of 6.95% notes due 2029 (the “Notes”). The Notes will mature on May 30, 2029. We will pay interest on the Notes on May 30 and November 30 of each year, beginning on November 30, 2024. In our sole discretion, we may redeem the Notes in whole or in part at any time or from time to time at the redemption price set forth under “Description of the Notes—Optional Redemption” in this prospectus supplement. In addition, holders may require us to repurchase the Notes for 100% of their principal amount upon the occurrence of a Change of Control Repurchase Event (as defined herein). The Notes will be issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.
They trade by CUSIP number, not symbol
The Notes are a new issue of securities with no established trading market. The Notes will not be listed on any securities exchange or quoted on any automated dealer quotation system. Although the underwriters have informed us that they intend to make a market in the Notes, as permitted by applicable laws and regulations, they are not obligated to do so and may discontinue any such market making activities at any time without notice. See “Underwriting.” Accordingly, we cannot assure you that a liquid market for the Notes will develop or be maintained.
FWIW – I bought some yesterday on IBKR for $98.39
Thanks Maine for the info.
“Redeem a 3.90% ??”
Pay me now, or pay me later…
It matures in 2024, and their thinking is that they need to pay it off now since they have secured the debt to do it.
There is no telling if the credit markets would freeze up in the future and prevent them from re-financing it.
Check your watch lists. Noticing a nice uptick (migration to par or better) in yield the last hour on a bunch of perpetual preferreds. This is great timing as the ex date is imminent for June 1st payers.
US Treasury rates UP again today…
* 10yr T ~ now 4.613%, broke back above 4.6% threshold
* 30yr T ~ now 4.738%, pushed back above 4.7% threshold
* 2yr T ~ now 4.985%, testing 5% threshold
Brookfield Infrastructure Finance ULC
% Subordinated Notes due 2084
https://www.sec.gov/Archives/edgar/data/1406234/000110465924065904/tm2415565-1_424b5.htm
Thanks J
Seen at Schwab:
F&G Annuities & Life 6.5% 06/04/2029 Callable
30190AAF1
Senior, BBB-
Callable in whole or part Daily beginning 05/04/2029 with 10 days notice.
Make whole call Daily beginning 06/04/2024 with 10 days notice.
I’d like to know why Moody’s gives it only BBB-. Otherwise, looks pretty good. However, if t-yields continue to rise, there may be more good deals on the horizon.
FGN came out in Dec 2023 paying 7.95%.
6.5% is a Pretty big drop in coupon.
to say the least ..what was the structure? I also noted they issued a 7.40 coupon due in 2028 in september 2023
https://www.sec.gov/Archives/edgar/data/1934850/000162828023040352/fgannuitieslifeinc424b4.htm
Are we comparing a 7.95% 2053 senior baby bond FGN to a 6.5% 2029 senior $1000 issue with a minimum purchase of 10? The latter has the advantage of a maturity in my lifetime.
So, I ask again, why the BBB- rating?
The biggest positive going for these F&G bonds is that Fidelity National Financial (FNF) owns a majority stake in the company; in addition FNF just invested another 1/4 billion $$ into an F&G preferred offering.
FGN 6.5% R2S et al…
I bot some of those bonds @ 99.86 @ Schwab using CUSIP provided.
Thank you!
As many know, Wall Street firms (led by Blackrock) have started to issue spot BTC based exchange traded funds which require them to hold Bitcoin.
Needless to say – these firms can be expected to put these ETFs into their legacy funds in an attempt to spike returns (and to find buyers for these ETFs). This has already started to happen. Per this article, from a reliable crypto news source, Blackrock is starting to sneak BTC ETF holdings into their bond funds (of all things):
https://cointelegraph.com/news/blackrock-income-bond-funds-buy-bitcoin-etf
When the SEC finally approves spot Etherum etfs we can expect the same with spot ETH ETFs.
The crypto currencies BTC and ETH are not fixed income assets and have no place (at all) in fixed income funds. This is not investment advice, but if I owned a fund that suddenly included an allocation of either ETH or BTC etfs (no matter how small the allocation might be) I would shoot that fund.
Just passing it on FWIW.
Very informative article, thank you. Highlights a risk of buying funds: you might not get what the label suggests. Also that “diversifying” may not actually diversify.
“Mission creep” – noun – “a gradual shift in objectives during the course of a military campaign, often resulting in an unplanned long-term commitment.” JMO. DYODD
I agree August and Bear, this is concerning but actually not uncommon; I see things creeping into funds that change the rules or add risk. For the most part I don’t own funds or etfs except for a trade- of course zero commissions have helped us diversify by creating our own little ‘fund’ or etf within our portfolio w individual names.
Two examples of closed end funds I used to follow were Cohen & Steers ‘fund of funds’ the Closed End Opportunity Fund- (FOF)…all of a sudden a few years ago when perusing their holdings ETFs and Sprott gold/silver ETF were showing up- this may have been because of the shrinking CEF universe to select from, who knows. But not a pure fund -of- closed end funds for sure.
Other examples of ‘changes’ to suit keeping AUM were in BBN, the old ‘build America’ bond fund, when they stopped issuing those Build America Bonds. So in went taxable muni’s.
when rates were low, Western Asset ‘tip’ funds changed the rules because the distributions from zero income on tips at the time were eroding NAV w return of capital- they allowed bonds in, not pure TIPS, including high yield and junk bonds to juice income! talk about being pushed into risk in a low bond return time! WIW and WIA are the symbols. PIMCO puts so many hedges and swaps in their CEF’s who can analyze them! They used to be full of names you would know like Ford and IBM bonds, now it is a black hold.
Anyway sorry to go on but know what you are buying, read those reports where they tell you the composition and holdings! you may be surprised to find a bitcoin in there!! omg. Bea
These days, the general public can play with options trades, yet how many actually know what they are doing? Now we have BTC and others like Dogecoin that was created as a joke. A lot of players who know nothing are holding these. Thanks August for the public service announcement.
I sat in a board “pre”- board meeting yesterday for a company that supplies services to crypto companies/traders/etc. (they never own any crypto, only provides services for $ payments).
Fascinating to see how much that industry is growing, and how (IMHO) it still really has no real reason to exist.
Interesting conversation with company execs and financial backers.
The company is happy to make (a lot of) money for now with crypto, but they are preparing for a potential “pivot” away from crypto.
I gotta say, it is truly scary seeing the crypto industry take off and creep into so many corners of the economy. I personally think it is a huge potential risk to the economy, but there is a lot of money to be made in the mean time. Key is knowing when to sell your tulips
US Treasury rates ticking UP today….
* 10yr ~ 4.544%, now above 4.5% threshold
* 2yr ~ 4.983%, knocking on the 5% door
AY – https://www.atlantica.com/wp-content/uploads/documents/Atlantica-Enters-into-Agreement-to-be-Acquired-by-Energy-Capital-Partners-and-Co-Investors_VF.pdf [AQN RELATED]
Atlantica Enters into Agreement to be Acquired by Energy Capital
Partners and Co-Investors….The transaction is to be completed pursuant to a scheme of arrangement (the “Scheme”) under the U.K. Companies Act 2006. Algonquin Power & Utilities Corp. and Liberty (AY Holdings), B.V. (collectively, “Algonquin”), which hold approximately 42.2% of Atlantica’s shares, have entered into a support agreement with Bidco pursuant to which Algonquin has agreed, subject to the terms of that agreement, to vote its shares in favor of the Scheme….
https://www.sec.gov/Archives/edgar/data/1174169/000117416924000035/atlanticaacquisitionmcrwit.htm
Algonquin Power & Utilities Corp. Announces Its Support for Energy Capital Partners’ Proposed Acquisition of Atlantica [NOTE THE LAST SENTENCE ABOUT USE OF PROCEEDS – AQNB IN LINE FOR REDEMPTION EARLIER THAN ORIGINALLY PLANNED?]]
OAKVILLE, Ontario – May 28, 2024 – Algonquin Power & Utilities Corp. (TSX/NYSE: AQN) (“AQN” or the “Company”) today announced it has entered into a support agreement (the “Support Agreement”) with a private limited company (“Bidco”), which is controlled by Energy Capital Partners, and Atlantica Sustainable Infrastructure plc (NASDAQ: AY) (“Atlantica”). AQN and its subsidiary Liberty (AY Holdings) B.V., which holds approximately 42.2% of the shares of Atlantica, have agreed, subject to the terms of the Support Agreement, to cause such shares to be voted in favour of a transaction agreement (the “Transaction Agreement”) separately announced today by Atlantica and Bidco.
Bidco has agreed, subject to the terms of the Transaction Agreement, to acquire 100% of the shares of Atlantica for $22.00 per share in cash (the “Transaction”). The purchase price represents an 18.9% premium to Atlantica’s closing share price on April 22, 2024, the last trading day prior to the emergence of market rumours regarding a potential acquisition of Atlantica. Further, the purchase price represents a 21.8% premium to the 30-day volume weighted average trading price as of April 22, 2024. The Transaction values Atlantica at an equity value of approximately $2,555 million, valuing AQN’s 42.2% stake at approximately $1,077 million. AQN expects the proceeds will be used to help reduce debt and recapitalize its balance sheet as part of its ongoing strategic transition to a pure play regulated utility. All dollar references are to U.S. dollars.
Reports coming in that T-Mobile has firmed up a deal with US Cellular USM. USM up 8% and TDS up 18% pre-market. TDS preferreds still asleep. TMUS and VZ unchanged. JMO. DYODD.
T-Mobile to assume the debt 👍
“T-Mobile, which is controlled by Deutsche Telekom , said it plans to make an exchange offer to holders of up to $2 billion of U.S. Cellular debt and will increase its cash payment to compensate for any debtholders who choose not to exchange their bonds.”
https://www.wsj.com/business/telecom/t-mobile-to-buy-most-of-u-s-cellular-in-4-4-billion-deal-including-debt-779c4c09?st=e1rgvtdxhhchxxs&reflink=article_copyURL_share
There seems to be a bit more to it than just assuming it……
T-Mobile expects to conduct an exchange offer under which holders of certain UScellular debt with a face value of approximately $2 billion will be offered the opportunity to participate in an exchange offer of their UScellular debt for T-Mobile debt. Specific details of the expected exchange offer will be provided in due course. The amount of any debt exchanged will serve to reduce the cash payable to UScellular.
https://www.sec.gov/ix?doc=/Archives/edgar/data/821130/000110465924065327/tm2415626d1_8k.htm
Thanks J. It lists all 4 debt issues on page 10 of the presentation, which total slightly over $2bn. So I guess a tiny amount, >5%, could get stranded w TDS if 100% elects to get transferred.
This is a major positive for the longer issues.
Actually.. I re-read the sec filing and presentation. I think all 4 debt issues are 100% exchangeable. The wording was structured to allow for some USM debt holders deciding to keep their existing issues.
Again, a very positive outcome. Of course, deal isn’t done.. but I assume TDS was very careful to craft this to work w regulators.
“the assumption of up to approximately $2,000,000,000 in debt”
Selling my highest cost UZD, there’s always a chance the DOJ doesn’t approve the deal
I did the same. I am no longer invested in Cellular One. Sold at $24.35. That’s a 6.4% yield which I can find elsewhere in this market.
I’m of same concern of regulatory approval. Especially after TMo just raised prices on customers that were promised “price lock”, and then the concerns how Tmo handled Mint acquisition, and further why regulators wouldn’t approve acquisition of IRobot by Amazon (I’m really baffled why that was such a huge concern). Good luck to those who HODL to US Cellular issues.
Sold the rip in TDS.v/u and will look to reload as like QDI fwiw. TDS already mentioned their pref’s ‘were cheap money’ so not expecting retire with ’25 closing windfall….
Do those debt issues include TDSPRU and TDSPRV?
Wondering the same.
Will they pay divs or do they go into the gray purgatory?
U & V amount to almost $500mm and could be called within 120days of the deal closing, but their relatively low coupons will probably preclude call.
Gary:
It’s a strange deal. TDS is still going to exist as a stand alone company. TDS owns 83% of USM. So if USM does a big distribution of cash to shareholders when and if deal closes next Summer, TDS should benefit.
But TDS cut the common dividend by a monster 80% today. Trying to figure out if all this is good news for the two TDS preferreds. I have never owned them, but is there value now at 8.4% yields?
Here is what TDS said today:
https://www.tdsinc.com/news/news-details/2024/TDS-Board-Announces-Unanimous-Support-for-Sale-of-UScellulars-Wireless-Operations-and-Select-Spectrum-Assets-to-T-Mobile/default.aspx
Why do you think the TDS preferreds are going dark? TDS and USM are separate companies. According to the press reports, the TMUS bid is for US Cellular, not TDS.
Bear-
Sorry got confused over who was actually selling – expecting the worse for my little bit of TDS-U.
Essentially the same companies. Usm went up, which directly benefits TDS. They own such a large percentage it’s basically one. Would be great to see them all make a run to par. The problem is, will the doj attempt to block it. Without the cash both companies were major risks.
The issues listed in the investor presentation I believe are gjh, uzd, uze, and uzf, if I’m understanding it right
TDS might have been up in pre-mkt, but is off almost 2% now- wonder what happened after opening. Preferreds up a little.
The common is getting cut.
UZD ex-div 5/31, Friday
Tuesday, May 28
T+1 investing is finally here…1 day trade settlements begin today.
CSSEN
Did they make the payment on 4/29 or not?
I got paid by one broker and not by the other. On Bloomberg it shows that they declared a payment late and also an interest on interest to make up for the late payment.
Any other III readers hold some of this ?
CUBI-E and CUBI-F – NO big deal but, “Customers Bancorp, Inc. Announces Dividend Correction on Its Series E and Series F Preferred Stock” – naturally both adjusted down – no particular reason for the mistake given –
https://www.customersbank.com/investor-relations/press-releases/press-release/0c303ed1-d81d-4d6d-922a-761f25c61fa2/
WEST READING, Pa.–(BUSINESS WIRE)– Customers Bancorp, Inc. (NYSE:CUBI) announced a corrected dividend amount on its Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series E (NYSE: CUBIPrE) and Series F (NYSE: CUBIPrF), previously announced on April 29, 2024. As corrected, the cash dividend on its Series E (NYSE: CUBIPrE) will be $0.700488 per share, payable on June 17, 2024, to shareholders of record on May 31, 2024, and the cash dividend on its Series F (NYSE: CUBIPrF) will be $0.675813 per share, payable on June 17, 2024, to shareholders of record on May 31, 2024.
Institutional Background
Customers Bancorp, Inc. (NYSE:CUBI) is one of the nation’s top-performing banking companies with nearly $22 billion in assets, making it one of the 80 largest bank holding companies in the U.S. Customers Bank’s commercial and consumer clients benefit from a full suite of technology-enabled tailored product experiences delivered by best-in-class customer service distinguished by a Single Point of Contact approach. In addition to traditional lines such as C&I lending, commercial real estate lending and multifamily lending, Customers Bank also provides a number of national corporate banking services to specialized lending clients. Major accolades include:
No. 5 on American Banker 2023 list of top-performing banks with $10B to $50B in assets
No. 29 out of the 100 largest publicly traded banks in 2024 Forbes Best Banks list
No. 52 on Investor’s Business Daily 100 Best Stocks for 2023
A member of the Federal Reserve System with deposits insured by the Federal Deposit Insurance Corporation, Customers Bank is an equal opportunity lender. Learn more: http://www.customersbank.com.
Ooops! I see Rocky Mountan Hiker beat me to the punch! LOL
Actually, they were both adjusted up.
CUBI-E went from 0.685584 to 0.700488
CUBI-F went from 0.661434 to 0.675813
Maybe up from last quarter, but down from the April 29th original announcement of declared dividends for June 17th payment..
Nope, here’s the April 29th announcement:
https://www.businesswire.com/news/home/20240429171431/en/
David – I tell you things are really getting worse…… I’ve always been a slow reader even in my younger days, but at least back then I I could read accurately… You of course are right………. I hate posting wrong info… Thanks for pointing this out…… Still would have loved it if they had given an explanation as to why the correction – or did I miss that too???
Cubi well respected???… Not in my book
WEST READING, Pa., May 24, 2024–(BUSINESS WIRE)–Customers Bancorp, Inc. (NYSE:CUBI) announced a corrected dividend amount on its Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series E (NYSE: CUBIPrE) and Series F (NYSE: CUBIPrF), previously announced on April 29, 2024. As corrected, the cash dividend on its Series E (NYSE: CUBIPrE) will be $0.700488 per share, payable on June 17, 2024, to shareholders of record on May 31, 2024, and the cash dividend on its Series F (NYSE: CUBIPrF) will be $0.675813 per share, payable on June 17, 2024, to shareholders of record on May 31, 2024.
Didn’t see this two days ago:
JPM new issue 48130CME2 6% 5/31/44, call 5/31/26
JPM 48130CME2 pays annually! #@&%!!!
FIDO Bond Inventory
It is unusual for FIDO to have so much new issue paper for sale on a Friday. Granted we are going into the weekend, but take a look at the #’s;
Treasury 6 – This doesn’t seem out of norm.
CD’s 200! – This seems high to me. Brokered CD’s are usually more expensive than going with the home market.
Agency 13 – This doesn’t seem out of norm.
Corporate 34 – Usually they sell out of these by Friday or only the dregs left. Most of the issues from this morning were banking institutions. There are three PSEC’s, one Dow Chemical, and a Jefferies bond. So 29 banks need additional liquidity/capital.
Muni 149 – Wow, this seems REALLY high. Barfburg did mention that were a raft of inventory.
More color on the recent implosion of fintech Synapse. Check out these snippets!
“Apparently, other FDIC-insured banks besides Evolve Bank and Trust are also involved in this mess”
and …..wait for it……
“If all of this isn’t frightening enough, Synapse shares on its website that it also owns a registered broker-dealer (brokerage firm) that is regulated by Wall Street’s self-regulator, FINRA”
https://wallstreetonparade.com/2024/05/another-fdic-insured-bank-got-in-bed-with-fintech-its-now-got-a-dumpster-fire-and-desperate-pleas-from-customers-for-their-money/
The Bloomberg website main page has ignored this story.
Never heard of them but then I don’t download apps and start sending money to them. Call me old fashioned.
Me either!
Next Tuesday, May 28…
* T+2 switches to T+1 for US securities settlement time frame
I am still nervous about T+1 at schwab. No word from them about how MM fund sales to cover stock purchases will work.
Today, if you have a sale today, you can sell MM shares tomorrow during the trading day to cover.
With T+1, it would seem that we will have to sell same day before market close, which isn’t possible all the time. Often, I am not staring at my screen at the end of the trading day, and even if I am, lots of orders fill in the last couple of minutes of trading, and I can’t get a MM order in fast enough to beat the closing bell.
I suspect they are looking for a way to catch lots of folks with trading violations so they can force us to keep more cash in our accounts (that they can invest instead of us putting it in MM accounts).
I am surprised Schwab has not had more accounts move elsewhere with just 0.45% interest in ‘core cash’.
Their direct competitors do have core funds paying decent 5%-ish and some even make advertisements boasting about what they pay on cash without needing to buy/sell money funds…
Private-
I hadn’t considered your important case of a late day purchase. There needs to be a conditional order where if one order executes (the purchase, AON?), another order (sale of MMF) is placed.
Or even better, as mSquare mentioned, a decent yield on core cash.
keeping extra funds in the cash account (earning .01%) is one solution ; but if you sell the MMF the next day, you just get hit with 1 days margin interest ;
Schwab sent me a survey last week. Several questions the survey asked, on a score of 1 to 10 would you recommend Schwab to a friend, I gave them a 4.
What are the chances you would add to your account. Not Likely. ( I just recently moved a small account out) lastly they asked what they could do to improve. I told them the interest paid on the money market fund linked to my trading account sucks. I was going to be more polite but decided to get to the point.
Thanks Charles M.
What can Schwab do to improve?
I would add: posting interest, dividends, and matured notes early on payment day. Merrill post them at market opening; Fidelity (and former TDAm) almost always prior to market opening.
I was told that Schwab’s policy is to post dividends only after receiving them from the payor. TDA posted early on the assumption the payor would pay.
r2s – Do you know who Tommy Flanagan is??? That’s not Flan’agan, it’s Fla-na’-gan. I think his response to what you were told by a Schwab rep I imagine is, “Yes, that’s the ticket.” https://youtu.be/hV85E2S-Idw?t=45.
LOL
I have noticed that since the May 13th TDA to Schwab account transition, Schwab has paid dividends before the open, as TDA used to do. Of course there have only been a few test cases so far.
Totally agree with your comments. I had a large CD come due yesterday at Schwab and the funds are going to Fidelity because of the delayed dividend/interest payments and not sweeping to the money fund thing. Simple basic things, cannot believe Schwab won’t update their systems to be more customer friendly.
Ted,
My concern is less about the one day margin charge in a taxable account than about the trading violation in an IRA/Roth that can’t have true margin. If you sell in an IRA and don’t have funds by settlement, bad things happen (like being barred from buying without settled cash in the account in advance).
Schwab will let IRAs have “limited margin” (if you sign up) to (1) place buys against unsettled funds (i.e. if I sell something today, I can place a buy order against the proceeds from the sale immediately) and (2) place orders against money market fund balances (on the assumption that you will sell to cover).
In mutual fund trading, you can set up an order to do two things (sell X and buy Y). I would even be happy if they would allow something like that for stocks (sell X, then sell MMF to cover). I don’t see anything like that.
Schwab has a stated goal of trying to move closer to requiring clients to have settled cash in the account (earning nothing) before they can place an order. They mentioned it when they announced accounts last year that they had re-swizzled how they count “cash and equivalents” to make it harder to buy money market funds.
Schwab has publicly said that one of their biggest profit centers is investing cash that clients leave in their accounts, so it is in Schwab’s best interest to get clients to be required to hold more of that cash.
Private-
I was going to apply for Schwab limited margin until I read this:
For SEP-IRA and SIMPLE IRA account types, by agreeing to this limited margin agreement, you hereby represent that you are self-employed, and there are no employees participating in the SEP-IRA or SIMPLE IRA and that you meet one of the following criteria:
(1) You are a sole proprietor (who individually or with a spouse owns 100% of an unincorporated business);
(2) You are a partner of a partnership (who individually or with a spouse owns 100% of the partnership);
(3) You are a sole shareholder of a corporation (who individually or with a spouse owns 100% of the corporation);
(4) You are a spouse of an individual described in (1), (2), or (3).
Private, thanks for all your posts.
I had a GTC buy order at Schwab that triggered on Friday right prior to 4PM. It shows 4PM execution. It was a regular-hours order (i.e., not enabled for extended hours). Once T+1 settlement becomes effective on May 28th, one cannot rely on getting an executed order notification – Schwab text – to sell money market funds to cover. the purchase. I went ahead and cancelled all of my buy orders.
It would be great if they did enabled sweeps out of the high-yield MMs and/or extended the cut-off time for MM fund transactions to 5 PM. Merrill does.
As you may have mentioned, one cannot place a conditional order on MMs. to sell funds to cover. a purchase. But even that would not help when an order triggers right at closing.
Actually, there was word. They sent out email on May 9th saying that they were not changing the MMF rules. As ted mentioned, you might easily end up paying 1 day’s margin interest.
There have been a couple of times in the past where I was surprised by margin interest, and I did not have much trouble having it refunded as a customer service gesture. I expect there will be a lot of that going on after T+1 hits.
US 2yr/10yr Spread…
* (-0.47) today
* Largest spread YTD 2024
Somebody just bought 10k shs in SICPL or the old Silvergate Preferred. Seems kinda odd, no?
Would appreciate any color on this. I was down to the last ten shares on this pfd before the music stopped.
I’m still holding shares waiting for it to be resolved and distributed. l’ve never received a dime in a bankruptcy but I keep hearing this one has assets and is underpriced so I haven’t bailed out. Anybody have insights on what it’s actually worth and when it will be resolved?
There’s an active court case, Bhatia v. Silvergate Bank. See
https://www.courtlistener.com/docket/67659723/25/bhatia-v-silvergate-bank/
There was a case management conference on Wednesday 5/22.
https://www.casd.uscourts.gov/Judges/major/calendar/major_052224.pdf
I don’t have any insight into what came out of that.
The people who lost money in the FTX scheme are going to be made whole because crypto came back so strongly.
https://www.wsj.com/podcasts/the-journal/how-ftx-found-billions-to-repay-customers/afbc3972-30e7-461e-b09b-2c4c037a14e9
That’s all I have for facts, so the rest is speculation. If the FTX folks get their money back, there’s no longer a harm that needs to be redressed by Silvergate. Perhaps the lawsuit will end up getting dismissed.
One other thing: Silvergate Capital Corporation has missed six consecutive dividends at this point. Per the SI-A prospectus, the preferred shareholders now have the right to elect two members of the board. The catch is that 10% of them have to request this. This would also come up at the next annual meeting, so I sent an email to Silvergate Investor Relations asking about the next annual meeting. Here’s the response I received:
(May 20, 2024)
Hello Mr. [Retired Sailor].
The 2024 annual meeting is not on schedule at this time.
Best regards,
Judy
Judith Knowles
Corporate Secretary
It’s important for the preferred shareholders to get representation on the board so the common shareholders don’t do something that really hurts SI-A. As an example, SI-A is non-cumulative, so the Board currently can just hold off on paying dividends as long as they want, and there are no repercussions.
Friday’s volume was 71,600 shares. Price is up 42% over the last month per MarketWatch. Somebody knows something.
CFG-D redemption July 8
https://finance.yahoo.com/news/citizens-financial-group-announces-redemption-161800020.html
2WR – Your call date prediction for CFG-D back in April was only off by 2 days, not bad.
The two days is only because July 6 is a Saturday and it’s spelled out that in that case payments are made on the first business day thereafter…… I’m pretty sure amount to be paid will be equivalent to a July 6 call date, not July 8 date. Plus the amount to be paid is also spelled out – .59451865
https://investor.citizensbank.com/about-us/newsroom/latest-news/2024/2024-05-07-210556424.aspx
???
F&G Annuities & Life, Inc. 6.500% Senior Notes due 2029
https://www.sec.gov/Archives/edgar/data/1934850/000162828024024704/fgannuitieslifeinc424b5-05.htm
National Grid announces £7bn fundraise to power electricity network upgrades.
https://finance.yahoo.com/news/national-grid-announces-7bn-fundraise-084712073.html
Last week (?), FERC announced that it will changed the way grid operators in the US forecast and will fund grid expansion and other infrastructure improvements.
If it sticks, we will likely see a huge uptick in grid expansion spending. Probably not a terrible path forward (I haven’t read the details yet). Heaven knows the current system is a disaster and consistently leaves the grid badly underdeveloped/underfunded.
However, this passed FERC 2-1 along party lines, so who know what will happen after the election.
one of our project companies was doing wind and solar projects in the US a bunch of years ago, and it was shocking how badly grid planning is done in the US (and because of FERC rules, it was required to be so). With everyone running to go electric (vehicles, homes, etc). the infrastructure certainly isn’t ready.
I was reading about it in a trade publication (paywall) that a friend copied to me, but here is a news article about it.
https://www.msn.com/en-us/news/us/us-overhauls-electric-grid-to-make-way-for-more-renewables/ar-BB1mkt0E
Very interesting price action right now on perpetual preferreds and BBs. Across the board there are a swath of higher quality issues trading down from 50-100bps putting many either in that critical 6% yield range and at/under par.
Quick reference points, PRH, UNMA, BAC-B, JPM-C, HIG-G, SCHW-D
NRUC down 150 bps right now putting yield in 5.75% range.
SREA (-1.65%) new low since January high, CY 6.1%. Watching to see if this gets even better.
SR-A (-1.56%) new low since recent highs, CY 6.3%.
This morning after looking at the market, I felt like posting here, “Something’s going on.” Maybe it is. Treasury yields up noticeably, among other things.
Fido’s Mag 7 – All IG
Other than Prospect, Country of Panama, or Piedmont LP
1. CI Financial 12.17.2030 3.2% 79.277 YTW 7.225% BAA3
2. Concentrix 8.2.2033 6.85% 98.562 YTW 7.064% BAA3 BBB
Honorable Mention
1. Bank United 6.11.2030 5.125% 91.221 YTW 6.929% BAA3
Enjoy!
I have to take another look at Concentrix. The one thing that stood out to me is given their wheelhouse of infused tech solutions, analytics, AI based customer experience (nonhuman engagement), social media solutions etc. you would think the stock price would be surging given the current hyper growth state of this market. Just look at Nvidia this morning busting $1000.
But CNXC stock price is down 41% in the one year period.
Their entire debt load now is > their $4B market cap by nearly $2B or 48% more.
Their net profit margins are super thin low single digits.
Operating cash flow only in the $500mm range. Off hand on napkin math, the annual cost of all their debt going to be over $400mm.
I guess what I’m trying to politely say is, I don’t know if a 7% YTM is enough compensation for a near 10 year duration on something like this.