In another action that hurts investors PartnerRE has announced they will delist and deregister their PRE-J 4.875% non cumulative preferred. The reason given is the cost of administration is too high–this is balony of course.
So the preferred is off over $6/share today–current yield around 9%.
PartnerRE was purchased in 2016 by Pillar LTD and this there has been no parent trading since that time.
Thanks to J for posting their press release earlier today.
PartnerRe / PREJF filed its preferred share dividend declaration with FINRA earlier today:
+++++
Daily List Date/Time 05/12/2025 15:32:14
Event Type Cash Dividend Regular
Daily List Event Code DA
Effective/Ex Date/Time 05/29/2025 00:00:00
Subject to Corporate Action
Offering Type No Restrictions
Forward Split Ratio
Reverse Split Ratio
Dividend Type Cash Dividend
Percentage 0
Cash Amount 0.304688
Declaration Date 05/07/2025 00:00:00
Record Date 05/29/2025 00:00:00
Payment Date 06/16/2025 00:00:00
Payment Method
Qualified Dividend Code Unknown
Record ID 40147268
+++++
See https://otce.finra.org/otce/dailyList (filter by symbol, or scroll down)
Thanks ESW3!
PREJF seems like one of the best bets out there in terms of yield, safety, and room for appreciation.
BTW, do you (or fellow IIIers) recall the rules which determine whether the dividend will stay qualified??
I recall there is a rule that it will no longer remain qualified if it is intl and/or gets put on OTC. I’m sure my memeory is not precise!
Hi Maine, we really need a tax law expert to weigh in on this (Justin, are you reading?), but I remember that IRS Publication 550 defining a “Qualified Foreign Corporation” requires the stock to be “readily tradable on an established securities market in the United States”. See https://www.irs.gov/pub/irs-pdf/p550.pdf at page 29 (this is the 2024 version of Publication 550). The .PDF continues (lower on page 29) to state that:
“Readily tradable stock. Any stock or American depositary receipt in respect of that stock is considered to satisfy requirement (3) under Qualified foreign corporation if it is listed on a national securities exchange that is registered under section 6 of the Securities Exchange Act of 1934 or on the Nasdaq Stock Market. For a list of the exchanges that meet these requirements, see https://www.investor.gov/introduction-investing/investing-basics/glossary/national-securities-exchange.”
Here’s where it gets a little murky for me, but I don’t think that dividends paid on stocks that trade on the OTC market qualify as being “listed on an established securities market”. Hence these dividends are taxed at ordinary income tax rates, not the reduced qualified dividend rates. There’s an older (2003) discussion of the topic here:
https://www.irs.gov/pub/irs-drop/n-03-71.pdf
“Treasury and the IRS are continuing to consider, for future years, the treatment of dividends with respect to stock listed only in a manner that does not meet this definition, such as on the OTC Bulletin Board or on the electronic pink sheets.”
I don’t know if this ruling has been revisited since 2003.
Thanks for this
I have owned prejf for a few years. They were de-listed in July, but every dividend since then has been qualified in my tax reports from Merrill.
This is a day late, but I haven’t seen it posted here:
_____
Mar 18, 2025 4:00 PM Eastern Daylight Time
PartnerRe Ltd. Reports Full Year 2024 Results
PEMBROKE, Bermuda–(BUSINESS WIRE)–PartnerRe Ltd. (“the Company”) today reported Full Year 2024 Results
Highlights
* Gross premiums written of $9.35 billion
* Net income attributable to PartnerRe Ltd. of $1.44 billion
* Operating income of $1.22 billion and operating income return on equity of 14.0%
* Non-life underwriting result of $532 million and Non-life combined ratio of 90.6%
* Life and Health net allocated underwriting result of $190 million
* Net investment income of $773 million
PartnerRe has delivered positive operating results of $1.22 billion in the full year 2024.
The Non-life business produced an underwriting result of $532 million, driven by the Specialty segment which contributed $331 million and the P&C segment contributing $201 million.
The contribution from our Life and Health business continues to be a strong source of diversified earnings to PartnerRe as premium volume grew by 18.7% compared to 2023, with an overall Life and Health net allocated underwriting result of $190 million.
Our investment portfolio performed well, resulting in a 19.7% growth in net investment income compared to 2023. We are continuing to reinvest our cash flow from operations at attractive interest rates which continues to increase our portfolio’s book yield.
PartnerRe Chief Executive Officer Philippe Meyenhofer commented,
“PartnerRe had a strong 2024, with our Non-life business achieving an underwriting result of $532 million despite a challenging year with several catastrophe losses and U.S. Casualty reserve strengthening. Life and Health also saw solid growth, contributing $190 million in allocated underwriting result. Strong net investment income helped drive a return on equity of 16.4% for the year.”
https://www.businesswire.com/news/home/20250318532522/en/PartnerRe-Ltd.-Reports-Full-Year-2024-Results
https://www.partnerre.com/wp-content/uploads/2025/03/Full-Year-2024-Press-Release.pdf
PartnerRe Upgraded To ‘AA-‘ On Core Group Status To Covéa Cooperations; Covéa Core And Guaranteed Subsidiaries Affirmed
Overview
* We now regard PartnerRe Ltd.’s operating entities as core, rather than highly strategically important, to Covéa Group, owing to our view of the diversified earnings they bring to the group, along with the group’s unwavering and steadfast support to its subsidiary, which will offset potential pressures on PartnerRe’s stand-alone credit profile.
* We therefore raised our rating on PartnerRe, equalizing it with the group credit profile, to ‘AA-‘ from ‘A+’, and affirmed our ‘AA-‘ ratings on Covéa Group’s core and guaranteed subsidiaries.
* The stable outlook reflects our view that Covéa Group can maintain sufficient capital levels to withstand an event of extreme stress and benefit from strong earnings over the cycle, enhanced by the diversity PartnerRe adds to the consolidated group.
Rating Action
PARIS (S&P Global Ratings) Jan. 27, 2025–S&P Global Ratings today raised its long-term financial strength rating on PartnerRe group to ‘AA-‘ from ‘A+’ because we now consider PartnerRe to be a core entity of Covéa Group. We also raised the issue ratings to ‘A’ from ‘A-‘ on its senior unsecured notes and to ‘BBB+’ from ‘BBB on its preferred stock.
We also affirmed our ‘AA-‘ long-term financial strength and issuer credit ratings on the core and guaranteed subsidiaries of the France-based Covéa Group (see the Ratings List for details).
The outlooks on all our long-term ratings remain stable.
https://disclosure.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3314054
PREJF is showing up as OTC pink currently:
https://www.otcmarkets.com/stock/PREJF/quote
Dick just curious, do you own some or thinking about buying?
I have a small position right now. I bought some under the old PRE-J symbol after the delisting notice was issued and added some today under the OTC symbol.
I’m going to keep an eye on it and may add more depending on price and cash available. As always, DYODD.
I received the following response from PartnerRe IR regarding the OTC listing for PREJF (https://www.otcmarkets.com/stock/PREJF/quote).
———————————————————–
“PartnerRe plans to continue to meet the OTC’s “Pink Limited” requirements.
“Pink Limited” shares can also continue to be proprietary quote eligible (PQE) and Piggyback Qualified – Catch All.
Best regards
Stephen Boylan
Group Treasurer
Direct +33 1 44 01 81 10
Partner Reinsurance Europe SE, Succursale Française, 32 rue Guersant, 75017 Paris, France
http://www.partnerre.com | Twitter | Linkedin”
which probably explains the spike that has been going on. Its been a nice pickup to keep my overall yield > 7%. BBB rated. Maybe one of my best buys for the year.
Thank you for updating. Much appreciated.
Thanks for the reminder Dick–spreadsheets being updated now.
I saw a couple of large prints in this of 150,000 and 600,000 total if memory serves, last Thursday. Those could be an ETF cleanup but PFFF still holds this.
Does anyone know if PFFF is required to sell?
This is why I no longer buy a preferred stock where an underlying common stock is not listed on an exchange, or does not pay a dividend.
It’s like someone pointing a gun at you, while assuring you they won’t pull the trigger.
If that means missing out on an attractive issue, so be it.
Regarding PartnerRe Ltd., yesterday @Kid Twist wrote:
_____
Thanks for feedback. I don’t think PFF has even started selling its PRE+J position yet. The robots who run that big, dumb ETF still may not even know about the going dark status.
I’m holding out for $12.50 and 9.75% yield. This is likely to be one wild ride between now and 7/19/24. Hold onto your britches!
https://innovativeincomeinvestor.com/reader-initiated-alerts/comment-page-13/#comment-121274
____
This may be obvious to many of you, but PFF has not in fact begun selling its PRE-J shares. As of yesterday, they still owned 785,556 shares. Since PFF follows its underlying index PHGY (the “ICE Exchange-Listed Preferred & Hybrid Securities Index”), it will not begin selling until July 31st at the earliest, when under the ICE rules PHGY will remove PRE-J from its August, 2024 index (the ICE rules for PHGY state that it can only hold NASDAQ- or NYSE-listed preferred shares).
PFF has gotten a lot better about offloading shares it can no longer hold, but I’d be waiting until the end of July or even August before I even thought about putting in a lowball offer for the soon-to-be-dark issue.
The nearest similar situation I can think of off the top of my head is with HMLPF. Hoegh announced its delisting on December 5, 2022. Form 25 delisting HMLPF was filed on December 23, 2022. PHGY removed HMLPF from its index on February 1, 2023. PFF got rid of over 530,000 HMLPF shares on January 30th, 2023 and the stock closed at $18.00 that day (it did a good job offloading the shares, and the stock didn’t crater during the month). But one retail US brokerage (Schwab) didn’t remove HMLPF to its restricted “sell-only” list until late March, 2022 – when shares traded in the low $11 range.
So if someone were bound and determined to own PRE-J as a dark, expert matter holding, patience would seem to be a virtue.
But…..if it goes unlisted/dark on July 19th, will us retail customers be able to buy it after that?
As of July 2nd PFF has 785,382 shares of PRE+J, so no notable selling yet. Even if PRE+J goes dark it would seem to be a good long term hold when it goes sub 12 and the yield gets over 10%.
I was wrong earlier this month when I wrote:
_____
“Since PFF follows its underlying index PHGY (the “ICE Exchange-Listed Preferred & Hybrid Securities Index”), it will not begin selling until July 31st at the earliest, when under the ICE rules PHGY will remove PRE-J from its August, 2024 index (the ICE rules for PHGY state that it can only hold NASDAQ- or NYSE-listed preferred shares).”
_____
In fact, PFF sold 51,065 shares of PRE-J on Tuesday, July 16th and another 328,706 shares yesterday (Wednesday, July 17th). As of this morning, PFF has 408,047 PRE-J shares remaining – see https://www.ishares.com/us/products/239826/ishares-us-preferred-stock-etf. (Strangely, they purchased 696 PRE-J shares on Monday, July 15th.)
I (and others) have been critical of the iShares Preferred and Income Securities ETF, since over the years they have created interesting opportunities by slowly selling off various preferred shares into an illiquid market. In this case, anyway, they’re getting ahead of the upcoming delisting, and they’ve done so in a manner that hasn’t completely cratered the stock price.
I’ll leave it to others to explain the market mechanics of how they’re arranging these large sales (Tex the 2nd has discussed this previously), but I thought it was interesting to note this change in approach.
Thank you ESW3 – appreciate you bringing this to our attention
Open question on this. According to quantum online
How does the rating agency language below effect it things?
Also any chance they stop declaring dividends or do they have other downsides associated with that?
This security is possibly subject to an early call as a result of an amalgamation or merger at $26.00 (104%) of their principal amount plus declared and unpaid dividends. (see the prospectus for further information). The Company may redeem the preferred stock before 03/15/2026 at $25 (100%) of their principal amount plus declared and unpaid dividends, if a regulatory capital event occurs; before 03/15/2026 at $25.50 (102%) of their principal amount plus declared and unpaid dividends if a rating agency event occurs. (see prospectus for further information).
This security was rated as Baa2 by Moody’s and BBB by S&P at the date of its IPO. In regard to the payment of dividends and upon liquidation, the preferred shares rank junior to the company’s senior debt, equally with other preferreds of the company, and senior to the common shares of the company. See the IPO prospectus for further information on the preferred stock by clicking on the ‘Link to IPO Prospectus’ provided below.
If it came out to the public as a registered security then it must be maintained that way or call it. You want to take it private then perform instead of poisoning the process of transparency (which is SUCH a big bs lie by fact). Where’s the SEC? Oh yeah, learned from a real pro in the era of Geithner the Bailout Saint.
“Let them eat cake!”
“If it came out to the public as a registered security then it must be maintained that way or call it”
I see nothing in the prospectus requiring this and based on my knowledge of securities law, if you are saying it must remain listed or be called, I do not believe this is correct.
Can you post the pricing table for NEE-S? Thank you!
Tim, it looks like a risk with all these private insurers. Aspen included? I wonder if they will try to buy them back on the open market on the cheap! The insurer needs the rating to acquire/issue the insurance, obvious no rating on the preferred’s.
Good point Goldshoe—and Apollo Global has both Aspen and Athene.
They have floater trading now ~ 89 or current yield of 8.90% Floats at 258 over 3m sofr cusip 70212JAA3 Need about 12 pps on J to get a 10% current… fwiw
The question is whether they will continue to pay S&P to maintain a credit rating. Presumably they would want continued access to public debt markets but maybe they have alternative financing.
S&P last reviewed them Jan 2024 so they’ve paid to keep a rating so far.
They have a lot of issues for related entities.
I got some.
https://www.partnerre.com/financial-information/
This is surprising and bad for holders of PRE-J. PRE is an insurance company that was taken private a few years ago. At the time, they treated preferred shareholders very well giving their high coupon prefs a fresh set of call protection for no reason other than the kindness of their heart. Eventually they called them and refinanced with PRE-J. Now out of the blue they are delisting them. It’s a strong insurance company and these prefs are comfortably IG but the yield wasn’t amazing even if they continued being listed. As a pref that will get De-Listed and move to the expert market, I wouldn’t want to own it.
I think I see what happened here. PRE was taken private by Exor back in 2016. That’s when Exor treated preferred shareholders unusually well by giving them a fresh set of call protection. They called them and then issued PRE-J in 2021, likely with the intention of keeping it listed. PRE was then sold to Covea in 2022. Looks like new ownership is not as preferred shareholder friendly. Exor is a publicly traded company and it appears Covea is privately held and that probably played into it.
Landlord:
Thanks for your feedback. I must reiterate that you are one of the finest commenters on this site and I always consider your posts as “must reads”.
Might this be the old Blackstone 2-step?
1: They announce the de-listing.
2: After the price gets torched in reaction to the announcement, they come in with a tender offer above the diminished price, but still well below the price before the announcement.
A cheaper way to retire at least some of the preferred shares.
Good luck to them if wish to raise monies in future.
Dividend to disappear forever?
Not the dividend, just the liquidity if you want to sell.
PRE-J is now trading under PREJF. It is now being shown as “Pink Current Information” and piggyback qualified for proprietary quote eligibility.
https://www.otcmarkets.com/stock/PREJF/quote
PROPRIETARY QUOTE ELIGIBILITY
PQE Status – Yes
PQE Reason – Piggyback Qualified – SEC Reporting
Derek, the dividend is not going to disappear. But they no longer have to report financials. It will be difficult to track. I tried to follow the trail this morning and looked them up on quantum and saw where Pillar had bought them and a Dutch company owned Pillar now looking at the Internet it seems like Pillar is partly owned by a PE ( private equity) group. But I’m no expert
PE ownership and listed in Bermuda and changes in ownership over 8 or 10 years would require more research before I would own
Thanks. Was being only slightly sarcastic. But it is non-cumulative, so what would stop them? Couldn’t they just retain capital and earnings within the PartnerRe insurer subsidiary without paying further dividends to the parent (or preferred holders) and then cash out when then they sell it on to the next guy?