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Sandbox Page

I will be adding a new link titled “Sandbox” in the right hand menu.

That link will get you to this page.

I had originally set up the “Reader Initiated Alert” page for ‘alerts’. I was thinking this, for instance, might be when a preferred stock is undergoing a temporary selloff and someone wants to let the population know about it quickly. Of course we all (including me) use the ‘alert’ page for general messaging.

I am requesting that we start using the Sandbox page for all general talk, and try to preserve the ‘alerts’ page for ‘alerts’.

I have had a screen up on one of my monitors all week where I see all comments – no matter where they are posted–it is a great page and I wish everyone had a page like that–believe me we all benefit from all the knowledge being shared. I don’t want to stifle any of the exchange of knowledge, but hope to get things a bit better organized by adding the Sandbox page.

1,969 thoughts on “Sandbox Page”

  1. I know that Enbridge Cumulative Redeemable Preference Shares, Series 5 (TSX: ENB.PF.V) trades in the US as EBGEF.

    And I know that Enbridge details their preferred issues at https://www.enbridge.com/investment-center/stock-and-dividend-information/preferred-hybrid-shares. On that page, Enbridge specifies that Series 5 pays in USD (although that page is sadly out of date wrt the new reset rate for the series)(thanks to 2wr for posting the link to the press release specifying that).

    ETRADE is reporting a dividend for EBGEF that’s less than 6.683%. I suspect it’s because of Morgan Stanley’s infuriating policy of not explicitly reporting withheld foreign tax (they only publish the net dividend), so I have go argue with the know-nothings and figure it out. I’m sure the first thing they’ll do is claim that EBGEF is not Series 5.

    Can anyone remind me where Enbridge states that Series 5 trades as EBGEF?

  2. For what it is worth – anyone considering bottom-fishing with the two NYCB income securities (that are getting crushed again today), there was an editorial this morning on a prominent financial website insinuating that NYCB management (and perhaps investors) should have seen this disaster coming:

    “NYCB Woes Offer Lessons Beyond Real Estate
    More equity and seasoned management are the best defenses against losses, no matter what form they take.

    March 4, 2024 at 3:00 AM PST

    When banks get into trouble, it often comes as a shock. Then the problems seem obvious in hindsight — if only managers and supervisors had been paying attention. The recent turmoil at New York Community Bancorp Inc. is a case in point.

    Since a sudden writedown of two commercial real estate loans in January, NYCB has suffered a quarterly loss, 71% dividend cut, two-thirds decline in its stock price and credit downgrade, along with shareholder lawsuits, management upheaval and the disclosure of “material weakness” found in an internal loan review.

    Two lessons stand out from this debacle.

    One involves capital. Because NYCB was (until recently) small enough to avoid stringent capital requirements, it became highly leveraged. Setting aside balance sheet intangibles like goodwill, a 7% loss on its assets would be enough to wipe out its equity.

    NYCB’s Highly Leveraged Balance Sheet
    Excluding intangibles like goodwill, less than 7% of the bank’s assets have been backed by equity over the last five quarters

    Source: NYCB quarterly filings

    That strategy, which enabled NYCB to reward shareholders with hefty dividends, might have seemed reasonable five years ago. The bank had a solid position in a niche that seemed steady: making loans to rent-stabilized buildings in New York as well as other commercial properties. But the time to prepare for a storm is before it arrives.

    The storm came in two waves. In 2019, New York state curbed landlords’ ability to raise rents in rent-stabilized buildings, reducing their value by as much as 50%. Then the pandemic sent workers home, sapping demand for office space. Commercial real estate prices plunged.

    At this point, NYCB and its supervisors should’ve recognized the challenge posed to its business model and cut its dividend to preserve capital. Instead, the company diversified its business — first acquiring Michigan’s Flagstar Bancorp Inc. for $2.54 billion, then buying $38 billion in assets from Signature Bank last year after it failed and was taken over by the Federal Deposit Insurance Corp.

    A second lesson involves managing growth. Flagstar was a lot for NYCB to swallow; assets ballooned by 43% to $90 billion and the bank gained a national mortgage platform. Yet, less than four months later, regulators let the company buy the Signature portfolio. The deals catapulted NYCB’s assets to more than $100 billion, subjecting it to capital and liquidity requirements and annual stress tests.

    Management apparently wasn’t up to the challenge. NYCB’s chief risk officer and chief audit executive departed. On Feb. 7 — after the earnings warning, stock plunge and credit downgrade — the bank suddenly named Alessandro DiNello, Flagstar’s former chief executive, as executive chairman. By month’s end, the bank had also named DiNello its CEO, replaced the board’s lead independent director, taken a goodwill writedown, and disclosed that “ineffective oversight, risk assessment and monitoring activities” had hampered its internal loan review.

    Instead of attempting to resolve such problems as they arise, both banks and regulators need to do better at looking ahead.

    Apartment and Office Portfolios Show Cracks
    NYCB disclosed that 8.3% of its multifamily loans and 38% of its office loans have an elevated risk of default

    Source: NYCB fourth-quarter 2023 investor presentation

    Note: Data as of Dec. 31, 2023.

    All banks, even those serving niche markets, should fund themselves with enough capital — 10% to 15% of tangible assets would be a start — so they don’t have to scramble when losses inevitably occur. In its Feb. 7 presentation, NYCB disclosed it had $4.4 billion in “criticized” loans (which the bank sees as having an elevated risk of default), equal to about 60% of tangible capital.

    Supervisors, meanwhile, need to assess whether a bank’s management is really prepared for growth before greenlighting a major acquisition. Moody’s Investors Service cited the “high governance risks” caused by the executive turnover when it downgraded NYCB to junk on Feb. 6. If these risks had been recognized earlier, regulators would’ve been unlikely to sign off on the Signature deal.

    If these lessons are heeded, some good may yet come from NYCB’s chaos. The solution should be obvious — and not just in hindsight.”

    1. I thought someone posted here a month back that they knew management at NYCB and was going to talk with them. An update would be appreciated with all the bad news.

    2. I mostly trade them except for some closed-end preferreds I have which are in an entirely different category from the rest. But there are lots of times I own none. I’m interested in capital gains as much as I am the income. Maybe more. So I generally only buy stuff well below par.

      When SVB et al. went down and took everything with it there were some opportunities in the preferreds of much better banks. I basically keep an eye on what’s getting killed and search for preferred opportunities. If possible I hold them for a year to get the long-term gains treatment and reassess. I’m not afraid of short holding periods. I was almost day-trading them during the GFC. I had several one and two day holding periods. That was nuts.

      I had some NYCB.A. I did a pretty good job buying it but was late to sell. I got out with a very small profit of 3.X%. Basically beer money. When they announced their “material weakness in internal controls” that did it for me. It’s a bank. That’s like their entire job. Every day I ask myself if I should sell my other two.

    3. More NYCB chaos info today from CNBC. This moshpit is too crazy for me to personally dance in. But I like watching it though.
      Late Friday, Moody’s Investors Service cut the deposit rating of NYCB’s main banking subsidiary by four notches, to Ba3 from Baa2, putting it three levels below investment grade. That followed a two-notch cut from Moody’s in early February.

      The downgrade could trigger contractual obligations from business clients of NYCB who require the bank to maintain an investment grade deposit rating, according to analysts who track the company. Consumer deposits at FDIC-insured banks are covered up to $250,000.
      The Moody’s ratings cuts could affect funds in at least two areas: a “Banking as a Service” business with $7.8 billion in deposits as of a May regulatory filing, and a mortgage escrow unit with between $6 billion and $8 billion in deposits.

      “There is potential risk to servicing deposits in the event of a downgrade,” Citigroup analyst Keith Horowitz said in a Feb. 4 research note.

      NYCB executives told Horowitz that the deposit rating, which Moody’s had pegged at A3 at the time, would have to fall four notches before being at risk. It has fallen six notches since that note was published.

    4. I am down to clown on this one. As for the article..

      “a 7% loss on its assets would be enough to wipe out its equity.”

      So basically they would have to lose 8 billion. “At December 31, 2023, the Company had $113.9 billion of assets, $85.8 billion of loans, deposits of $81.4 billion, and total stockholders’ equity of $8.4 billion.”

      113.9 x .07 = 7.973 billion. Ok.. That is true or close enough.

      “NYCB disclosed that 8.3% of its multifamily loans and 38% of its office loans have an elevated risk of default”

      83 billion total loans. 44% multifamily (36.5 bil). 12% CRE (10 bil).
      8.3% of 36.5 bil = 3 billion.
      38% of 10 bil = 3.8 billion.
      Total 6.8 billion.

      So I guess those loans could be a total loss and equity goes down to 1.6 billion. Now how likely is it that every single loan with elevated risk goes to zero?

      “less than 7% of the bank’s assets have been backed by equity over the last five quarters”

      Yes.. they are a larger bank now. 7% won’t cut it. We are talking about capital requirements right? So it has to go up. That is exactly what they are working on. I mean the article is stating known facts but somehow they come off as a crisis. Is the reporting actually being realistic or sensationalist? I am still trying to digest the ratings downgrades but if NYCB can fully insure or collateralize them it might scoot by. 90% of the balances of the top 20 deposit relationships already are.

      The current CEO, Dinello, is the type of person you want at the helm. A person capable of turning around a mid sized bank will now take on the challenge of turning around a larger bank.

      The whole held to maturity security nonsense on this bank’s balance sheet is zero. Everything is available for sale. BTFP could be paid off, the loan reset by borrowing again, and could use that for another year even if BTFP expires March 11th right? If possible use the fed window to save a few bucks on cost of borrowing if the collateral can be used at the m-t-m value to get what they need loan wise.

      I am surprised they kept any common dividend above a penny but the cut will help their cap position. Run down some of the loan portfolio, slow down some lending growth unless the most optimal situation, and maybe even sell a choice asset or two if it made sense. They must have a team examining their liquidity profile every day at this stage. In the recent 10K we already know they are analyzing their “internal controls”. Hell, everything is being analyzed at this stage.

      So.. I was waiting for a >10% yield on A but I did not add anything yet. I feel with all the news coming out, panic feel in the air, I want PACWP pricing. I want sub 11 to add. I have owned U for what feels like a long time. Totally underwater. I bought some A recently and slightly underwater. I will double up on A if I see true blood in the streets. 7-11 per share of A sounds about right for the risk to add.

      PACWP got saved by a merger. In this case of NYCB the mergers have already happened and Dinello just needs to skate on thin ice for a few months to get to solid land. This could be a real winner here.

    1. Maine: Help me understand the message. I own a few REIT preferreds and have looked into buying more, but I’m new to all of this. Until a few months ago, my fixed income investments were almost exclusively Vanguard bond funds. This community has helped me explore a different approach, for which I’m grateful. What is it about REIT preferreds that suggests they’ve been structured in a particularly manipulative or dishonest way?


        1. Nimzo,
          Too many items to list. Some people say Preferreds are for suckers as they don’t have the protection as bonds, nor the upside of commons.
          I love individual preferred stocks but they aren’t for most as there are many land mines out there.
          Forget about individual name risk, there is structure risk… basically Preferreds have a lot less protection in periods of stress, namely covenant and capital stack.

          Good “cedar Preferreds” to look at a situation where common and bond investors won, but preferred holders lost. Or there can be situations like Rait financial, where there they spin off the good company, but the Preferreds stay with the weak remaining , and eventually goes bust.

          And of course, there is the non-cumulative feature. Grid and 2WhiteRoses are very knowledgeable about this topic.. basically, it pays to read the prospectus and understand the terms.

          PFFA isn’t the worst pref ETF.
          Or find a relatively cheap active fixed income etf or fund. Active pats over time with fixed income.

          1. So… Warren Buffet buys pref. stock.

            Am I Warren Buffet? No.
            But this fact shows that pref stock has it’s place.

            I also keep REIT pref shares in my portfolio and have never had a problem with them. I like to buy them below par however, and never them above par.

          2. Maine Just so it’s clear to Nimzo, so he can research a little on here or other sites your talking about Cedar Fair?
            On PFFA it’s a big preferred ETF so one or two failed holdings doesn’t affect it overall. We discussed it on here how it has been caught holding a preferred way above par and when the preferred gets called all that capitol appreciation is lost. As a holder of individual preferred you would hopefully be able to rotate out and keep the difference between the 25.00 call amount say if you were holding it at 27.00

            1. Charles,

              I’m pretty sure he’s talking about Cedar Reality Trust, which entered into a merger which paid off the common but left the preferreds stranded at a much weaker credit, Wheeler.

              In six months the preferred crashed from a $25 par down to seven bucks.

              1. Thanks O , I didn’t get involved as you might have guessed. But I figured for Nimzo I would try coming up with the full name of the company. Not very good , so I didn’t win the prize.
                At least he can research over on SA and see no one has been following WHLR since the merger in 2022 and .19 share price of the common.
                Mentioned as a buy by the HDO crowd

          3. Maine:

            You conveniently mention the disastrous Cedar preferred saga (as if all REIT preferreds could fall into this very unique trap and “land mine”) and fail to mention all of the property REIT preferreds that were either called for redemption at $25 during the 15-year period of lower interest rates since the GFC (fairly recent ones include AMH+E, STAG+C, PLYM+A, etc.), or had proper change-of-control clauses and were redeemed at $25 during buyouts (like SPG-TCO, STAR-SAFE, etc.)

            I have been investing in property REIT preferreds for many years now and they have allowed me to retire comfortably and live off a portfolio income stream.

            And then you post this crap:

            “And of course, there is the non-cumulative feature”

            Sorry…get your facts straight. Every property REIT preferred (and mortgage REIT preferred) is cumulative.

            I know you are smarter than to post nonsense like this? Maybe save these types of obviously misinformed comments for mostly useless sites like X/Twitter?

            1. Don’t let your misinterpretation of Maine’s comments of preferred stocks in general get in the way of your assumptions, kiddo. 🧐

            2. Kid Twist, Jeesh!!

              I’m just saying to be careful out there with prefs for those that are new to it.

              Sorry, I wasn’t thinking the non-cumulative doesn’t apply to REIT prefs.

              I do stand by notion; that most individual investors shouldn’t be buying single name prefs, or bonds, or even stocks for that matter, basically a boglehead view. But this doesn’t mean that many can’t do it successfully. Prefs are even more inefficient but also full of land mines that can be mid-understood and tend to appear during periods of stress.

              1. The Bogleheads approach is attractive to me. But by the time I learned about it, I had already assembled a portfolio of several dozen mostly dividend-paying individual stocks that I am not eager to dismantle, together with bond index funds that I have been happy to replace in part with preferred stocks and baby bonds. Facing retirement at the end of this year, the income they generate is welcome. Certainly these securities present risks. But I understand the gist of the discussion here to be that REIT preferreds aren’t necessarily more risky than other preferred stocks. I own RITM-A and RITM-D, and I have my eye on UMH-D., which just reported favorable earnings.

      1. One thing I love about prfds/BBs is being able to look at long-term charts to see how price behaved in times of market stress. And you can do the same for the parent companies.

  3. CHEMOURS Moody’s:
    The review for downgrade follows the company’s disclosure on February 29 that the company’s senior managers, including CEO, CFO and principal accounting officer are placed on administrative leave amid an internal review of the company’s practices for managing working capital, including the related impact on metrics within the Company’s incentive plans, certain non-GAAP metrics filed with SEC or otherwise publicly released. Chemours’ Board of Directors is also evaluating potential material weaknesses in the company’s internal control over financial reporting as of December 31, 2023. As a result, the company has delayed its full-year 2023 earnings release. The company has appointed Denise Dignam as the Interim CEO and Matt Abbott as the Interim CFO.

    1. Chemours – now there is a board I am glad I am not on.

      Does make me wonder about Dupont and Corteva. All came from the same company, same corporate culture.

      We have been hired to do several internal investigations of corporate wrongdoing over the years. I think spun off companies tend to have more management issues than “sold” companies (just my feeling – I have no data to back it up).

      When companies are acquired, the buyer tends to go through the acquired operation more carefully to make sure things are run properly. Spin outs often seem to just keep doing whatever the old company did – but the new management doesn’t always know why or how the old parent managed things, and sometimes unknowingly wander into nasty places.

      I will have to buy some popcorn and watch this one play out.

  4. Apologies if this has already been discussed in detail. I saw chatter on some other boards about the Via Renewables preferred stock. There is an imminent cash buyout in the works from NuRetailCo. I did find this tidbit in marketscreener with respect to the preferred stock after the merger completes. There still is a double digit yield on these: VIASP.

    …….Via Renewables expects that its Series A Preferred Stock, currently traded under the symbol VIASP, will continue to trade on NASDAQ following the transaction……..

    Merger is expected to close next quarter.

    1. Not an expert here, but from the press it looks like NewRetailCo is just a temporary legal entity. These kind of things are created for all acquisitions. Once the acquisition happens the name will be Via Renewables. The common equity will all be taken private and the pref shares will remain publicly traded.

      Personally – I would be nervous holding a preferred stock in a private company and would look for other options, but to each his own. I know others on here are comfortable with this structure.

  5. I have trouble navigating the finra website. Can anyone give me the link for new corporate bond and new long term semi-government agency offerings? Thanks.

    1. Randy, I was at work when I saw this. I’m no expert, but this is a start. I bookmarked this as my start.
      I haven’t tried entering in all of the detailed parameters, I just type in the first 3 or 4 letters of the company if that doesn’t work I try another combo.
      Down in the right of the screen is the reset and search buttons
      If you have the Cusip, Like the State Street one. What I do is scroll down on that page to the list of bonds already showing.
      I click on any one of them, it takes you to the second page that has the info for that bond. On that second page at the top is a search bar you can check the user agreement and enter the Cusip
      It will automatically take you to that bond info. Once you see how that bond is listed by the spelling of that bond you can go back to the first page and enter how State Street is spelled hit search and it will bring up all the listed State Street bonds.
      I apologize if this is cumbersome, I learned it this way. Maybe someone else has a easier way.

      1. Charles—-thanks. I live in Menlo Park half of the year and I sort of remember you live in the San Jose area.

        1. LoL Private is down in that area. I am up in wine country. Sonoma county. My brother and sister are down there in Saratoga. I get down there couple times a year.

  6. FWIW noticed my shares of RILYO were partially called yesterday for appx 80% of what I held.

    1. History? I feel people are conflating the recent bank run failures with a bank trying to turn things around and becoming better as each day passes. The 2023 10K will be late by a max of 15 days. The grace period. The new CEO and his team are basically cleaning house aggressively and may as well get all the bad news out ASAP. I may add to the preferred if we see a down market day and people really hammer this bank on top of it. I would want to see below 15 to add more -A. >10% yield before it floats.

      But with all this said.. it is sized as a speculative buy. I am not looking to own 1500 shares of this bank’s preferred.

    2. Yeah, $3.72 now -22%+. Oddly enough while also down hard, the A preferred is not hitting new lows and bounced pretty good off the opening low. Still a dollar above my cost. Exit stage left >>>>>>>>>>>>

      1. I had started buying the U again on the very day the news hit.
        Luckily, I had made quite a bit when the U fell to 18.10 a few weeks back.
        The sub debt never went below 75% so , trading at less than 40% of par briefly the U was an easy buy at that points. Dumped above 31.
        Best/ luckiest preferred stock arb in a long time

  7. RIV common dividend CY 13.0%. From RIV Feb 2024 19-A:
    “On February 29, 2024, the RiverNorth Opportunities Fund, Inc. (the “Fund”) paid a distribution of $0.1289 per share to shareholders of record at the close of business on February 15, 2024. In accordance with generally accepted accounting principles (“GAAP”), the Fund estimates that 92.16% of the distribution is attributable to return of capital and the remaining portion is attributable to net investment income. ”

    I take it that RIV is selling assets to fund the very large common dividend. Is it reasonable for a fund mostly invested in fixed income to pay out so much?

    1. Thanks for posting RtS
      What does that mean for the preferred I wonder? Are they supposed to keep a 200% ratio?

    2. I don’t personally understand how this fund works, but if you look at the NAV chart on cefconnect.com, it certainly does not appear to be destructive ROC.

      And no, a 13% yield is not outlandish for this type of fund. It’s less than PDI pays.


      1. David,

        I also don’t understand how RIV works but hoped someone else did. I noticed here https://www.cefconnect.com/fund/RIV on the Pricing Information tab that RIV has been trading at a sharp discount to NAV since the end of 2022, more so than at any time in its history. It would be interesting to see how that compares to similar funds.

  8. Looks like ZIONO and ZIONL not called this time around ;ex 2/29 ;
    so we are in for at least one more quarter of outsized returns from these 2
    investment grade credits;
    I spoke of these here several weeks ago ; my thoughts then ; win- no loose
    situation ; as my stripped price almost covered it.

      1. from the ZIONL prospectus:
        We will notify the holder, in writing, of the redemption not less than 30 days nor more than 60 days before the redemption date.

        1. and remember, individuals are not the holders. DTC is, so sometimes they get notified well before we find out about it.

  9. ALL-I – 4.75% coupon – last price is $23.71
    ALL-I – 5.1% coupon – last price is $23.01

    Efficient markets, huh?

    1. Dick right now 5 to 5-1/2 yield on an insurance preferred isn’t getting me excited. This market might be slow and steady but who knows. Could be the calm before the storm or the market could continue to grind higher. The market can not make sense for longer than we expect.
      I was looking at my All pJ and wondering about it, but quantum says first call isn’t until 7/15/2028 so not going to worry about that one getting an unexpected call and dropping to par.

  10. Enbridge EBGEF resets tomorrow at 2.82 plus 5 year treasury rate so at today’s rates that’ll be about 7%, which translates to 8% at the current price of 21.95. I have a position and was thinking about adding more.

    1. AJ – Does that mean you are locked in at that near 8% yield until the next reset in 5 years?

      1. theta,

        Yes, unless called early by the company but the prospectus mentions redemption only at 5 year reset dates. It has no maturity date so it can remain outstanding for as long Enbridge wants. This is a low liquidity issue that’s traded OTC so use a limit order and at schwab they charge about $6 per order. FYI, EBGEF has a BBB- credit rating.

        1. AJ – Always use limits. In retirement accounts, I believe no implications with respect to withholdings etc. Do you have this by chance in a taxable account? Do you receive the full distribution? Cheers.

          1. theta,
            I hold this in a regular account. They withhold Canadian taxes but you recoup those when you file your taxes. Not sure if they withhold taxes in an IRA. You may have to call the brokerage to ask.

            1. I called the Schwab international trade desk yesterday about the 15% in IRA’s. They do not withhold for most canadian securities in an IRA. They said it is based on the clearing house. You have to call them for each security to be sure.

              1. Don
                At schwab, there is also a form you have to sign to get the Canadian taxes right (at least they made me sign one a bunch of years ago, then made me sign again to renew it just a few years ago).

                Also, pay attention to your IRAs. Even when Schwab says there won’t be withholding, sometimes there is because the clearing house doesn’t do it right and schwab won’t lift a finger to fix it.

              2. Thanks for double checking Don. Personally I have not known anyone in a retirement account to have issues with respect to withholdings but that doesn’t mean anything. I don’t think off hand I’ve ever held a CAD position in my taxable accounts so was more curious about logistics there as well.

                1. Hi Theta,
                  I had trouble with withholding in an IRA about 10 years ago. The tax treaty is clear, and I had signed all the right forms but the agent in Canada just wouldn’t bother to get it right.

                  There was a gal on the silicon investor board who was in the same boat (I can’t recall her name). Grid might remember – I think he was in that conversation too.
                  She was relentless in chasing all the parties involved. once she had nailed down that the agent was messing up, they wouldn’t fix it and neither the issuer nor the broker would do anything to help.

                  So, you have to watch foreign payments in your IRAs that they get processed correctly (even from Canada).

                  That mess kept me out of Canadian issues for years – I am just getting back in this quarter in a small way to see whether the (non)withholding has been fixed.

                  In a taxable account, there is a 15% withholding (for US folks). You can usually get a credit for it when you file your US tax return.

                  1. In addition to the withholding tax issues, I experienced issues even receiving dividend payments. I owned a few Fairfax preferreds through Schwab. I received dividend payments on some series but not another. I spoke with IR and Schwab multiple times and couldn’t get it fixed. The company swore they sent the payment and Schwab said they never received it. It was an issue that traded on the Toronto exchange and I owned the OTC ticker symbol.

                    What good is owning a preferred stock if you can’t be reasonably sure you’ll get the dividend payments?

                    Needless to say, that experience left a bad taste in my mouth with regard to Canadian preferreds that trade with OTC symbols. I put these in the “too hard” category. I no longer own any and would not consider them in the future. I would possibly be open to buying through the Toronto Stock Exchange through IBKR someday.

                    1. The Company DID send it.
                      You know how I know?
                      I claimed some abandoned property from NY about 15 years ago. For shits and giggles, I checked NY for my employer’s name at the time.
                      22 pages of results and total payments of close to FIFTY MILLION that they claimed, including one physical bond redemption of $5 million and $11 million of shares owned by the long-dead CEO of a company that were in the firm name but in the worthless securities account because the identifier was only for insiders and not clear it was exchangeable for the publicly traded common shares.

                  2. For FIDO, there is a form you can complete for exemption from Canadian Tax Withholding.
                    After having 15% withheld from my first EBBGF dividend, I filled out the form and have not had it withheld since.
                    I can confirm that TurboTax gives you credit for Canadian tax withheld.

                    1. Westie, I’m about ready to bail ship on T Rowe
                      I had my honey call them to ask for the form and the gal she talked to said she had no Canadian stock in her account. I told her to call them back and tell them any stock ending with a F is the foreign security in this case only the Enbridge.
                      Second guy told her taxes are being taken out and talk to a tax professional just they are being taken out you don’t need the form.
                      What would you call that line of……

    2. EBGEF rate has already been determined as of Jan 31 – it will be 6.683% as per https://www.enbridge.com/media-center/news/details?id=123797&lang=en

      Enbridge Provides Notice of Series 5 Preferred Shares Conversion Right and Announces Reset Dividend Rates

      January 31, 2024

      CALGARY, AB, Jan. 31, 2024 /CNW/ – Enbridge Inc. (TSX: ENB) (NYSE: ENB) (Enbridge or the Company) announced today that it does not intend to exercise its right to redeem its currently outstanding Cumulative Redeemable Preference Shares, Series 5 (Series 5 Shares) (TSX: ENB.PF.V) on March 1, 2024. As a result, subject to certain conditions, the holders of the Series 5 Shares have the right to convert all or part of their Series 5 Shares on a one-for-one basis into Cumulative Redeemable Preference Shares, Series 6 of Enbridge (Series 6 Shares) on March 1, 2024. Holders who do not exercise their right to convert their Series 5 Shares into Series 6 Shares will retain their Series 5 Shares.

      The foregoing conversion right is subject to the conditions that: (i) if Enbridge determines that there would be less than 1,000,000 Series 5 Shares outstanding after March 1, 2024, then all remaining Series 5 Shares will automatically be converted into Series 6 Shares on a one-for-one basis on March 1, 2024; and (ii) alternatively, if Enbridge determines that there would be less than 1,000,000 Series 6 Shares outstanding after March 1, 2024, no Series 5 Shares will be converted into Series 6 Shares. There are currently 8,000,000 Series 5 Shares outstanding.

      With respect to any Series 5 Shares that remain outstanding after March 1, 2024, holders thereof will be entitled to receive quarterly fixed cumulative preferential cash dividends, as and when declared by the Board of Directors of Enbridge. The new annual dividend rate applicable to the Series 5 Shares for the five-year period commencing on March 1, 2024 to, but excluding, March 1, 2029 will be 6.683 percent, being equal to the five-year United States Treasury bond yield of 3.863 percent determined as of today plus 2.82 percent in accordance with the terms of the Series 5 Shares.

      With respect to any Series 6 Shares that may be issued on March 1, 2024, holders thereof will be entitled to receive quarterly floating rate cumulative preferential cash dividends, as and when declared by the Board of Directors of Enbridge. The dividend rate applicable to the Series 6 Shares for the three-month floating rate period commencing on March 1, 2024 to, but excluding, June 1, 2024 will be 2.05869 percent, based on the annual rate on three month United States Government treasury bills for the most recent treasury bills auction of 5.37 percent plus 2.82 percent in accordance with the terms of the Series 6 Shares (the Floating Quarterly Dividend Rate). The Floating Quarterly Dividend Rate will be reset every quarter.

      Beneficial holders of Series 5 Shares who wish to exercise their right of conversion during the conversion period, which runs from January 31, 2024 until 5:00 p.m. (EST) on February 15, 2024, should communicate as soon as possible with their broker or other intermediary for more information. It is recommended that this be done well in advance of the deadline in order to provide the broker or other intermediary time to complete the necessary steps. Any notices received after this deadline will not be valid.

        1. 2WR – It appears EBBGF is the way to go. Reset last summer @ 6.70% until June 2028. That lands yield around 7.7% vs current trading price.

          But you’re gaining less than 20 bps and giving up 8 months of time vs. the other series that is resetting tomorrow good through March 2029.

          1. Right now, EBGEF and EBBGF seem both to be a pretty easy comparative read since they are very close to identical in coupon for the next reset periods…. Maybe an ideal pair for Martin G to start trading between….. They should trade very close to equivalent share prices for the next year at least. Which one to choose I suppose would depend on your view of interest rates, whether it’s good to lock in for a little while longer or not….

        1. Among these, I think EBBNF is the best way to go, even though it’s current yield is the lowest.

          1. Why for, nhc? I own all 3 but consider EBBNF relatively high given the amount of current you have to give up to own it vis a vis the other two… you must be quite aggressive on your expectations for future interest rate moves downward I would think

            1. Start by comparing EBBGF to EBBNF. There is only a 1 bp difference in the adders. But because of the timing of the most recent resets, the EBBGF coupon of $1.676 is $0.212 greater than the EBBNF coupon of $1.464. This will continue until 9/1/2027 (3.5 years), when EBBNF resets. There will be about $0.74 more in EBBGF dividends until then. Based on the 5YT forward curve (as of the end of last week), the EBBNF coupon will be about $1.86 when it resets on 9/1/2027. The higher EBBNF coupon will continue until 6/1/2028 (0.75 years), when EBBGF resets. After that, based on the 5YT forward curve and the adders, the coupons should be about the same. While EBBGF is worth more than EBBNF (I estimate about $0.60 more), it is not worth ~$1.50 more.
              Now compare EBBNF to EBGEF. The current EBGEF coupon of $1.67 is also about $0.21 greater than the EBBNF coupon. Again, this will continue until 9/1/2027, when EBBNF resets. There will be about $0.72 more in EBGEF dividends until then. The projected EBBNF coupon of ~$1.86 at 9/1/2027 is `~$0.19 greater than the current EBGEF coupon. That will continue until 3/1/2029, (1.5 years from 9/1/2027) when EBGEF resets. After that, (without getting into what the 5YT will be on subsequent reset dates), the higher EBBNF adder of 33 bps is worth about $0.08 per year. I figure that the discounted present values of the future EBBNF and EBGEF coupons are pretty close. Yet, EBBNF is ~$1.60 cheaper.
              Therefore, I like EBBNF best of the three. I have no expectations for future interest rate moves downward, aggressive or otherwise.

    3. If you look at the prospectus, you’ll see that the reset rate determination date is 30 days prior to the call date, and it’s at 10am Toronto time. So that was Jan 31. I was looking at that and Enbridge seems to get lucky on those dates. The 5 year tanked, and the new rate is not that great, can’t remember just what it was. EBBGF has a better reset coupon and reset spread, but is trading a little higher now. This deal with Canadian reset rate preferreds is confusing, and some really smart investors believe that the rate reset date is the same as the call date. If you know otherwise, you have an advantage. Long after the rate is reset, the stock will continue to trade as if the rate had not reset. The next reset rate dividend for this stock will be in June. So, I wait and see what the reset rate is going to be for sure before I buy these. Learned my lesson trading EBBNF.

  11. Ego petere academiam ad comment. Per flipping preferreds close to call for small profits on margin: is it worth it with these margin rates? With margin rate at 13.2 % annualized, is it worth buying 200 shares of a preferred near call for $24.93 and quickly selling at $24.95, with worst case having to hold 15 days and receiving $25 being the downside risk? Margin allows same day flipping, and I’ve been about 95% successful on a number of smaller trial trades, and easily upload the trades to next years tax csv template. So my question is: When you flip same day, do they charge margin until settlement, or do they relieve you of margin charges same day? Seems like if they DO charge until settlement, you could incur charges over the weekend as well if you flip on a friday. So, if someone has a talent for the trading side, how do you maximize the profit from too long a margin charge period? Thanks, Fan59

    1. Fan ; at Shwab I have a margin account ; but never allow myself to be in a position where I incur any margin interest; I buy stocks with no free cash (funds are in the MM account) I have 2 biz days to settlement;( that is the date margin interest starts) to liquidate sufficient funds to cover ;
      now day trading rules might be different ; and since I don’t day trade I don’t know

      1. Its easier to get classed as a “day trader” than you might think. Just a few badly timed trades, and they brand you.

        Once you are branded, its VERY hard to get unbranded, and you have to fight them hard to not have them brand every account you have you have as a day trader (I have been through both processes. not easy.).

      2. Pattern Day Trader is meaningless if you have over $25,000 in your account. It’s just a nonsense SEC regulation from back when everybody and their brother was conned into day trading and some did not have the resources to cover their losses.

        1. Martin,

          As you say, it’s only supposed to be a problem for small accounts (under $25K).

          I had a go-around with Schwab several years ago because they tagged me as a pattern day trader in one of my taxable (margin) accounts. I flip enough that I deserved it, but I didn’t care (or so I thought).

          Then they flagged all my accounts – apparently because they had flagged one. small inherited accounts, my wife’s tiny tiny rollover IRA account (which I can operate) – every account I have any authority over.

          I had to fight with a whole bunch of people to get that reversed. Reps said it was ‘schwab policy’ to flag every account I could operate, “no exceptions”. One gal admitted it was a new policy.
          The idiots kept saying “just add funds or consolidate accounts”. I kept asking them how to do that for inherited IRA/Roth accounts (can’t make deposits, can’t combine) or for accounts I don’t own (like my wife’s). I kept asking about how their policy fit in the SEC/FINRA rules (for example, they were flagging non-margin accounts!) – they said it didn’t matter because it was company policy.

          Took several days and a couple of escalations to get all that reversed. They never flagged my non-margin accounts again, but I don’t know whether that is because they hard-coded exceptions for me or because they reversed that “policy”.

      3. Thanks, Ted, and everyone –
        It does seem like more effort and risk than any reward.

        1. thanks to Private for detailing the consequences of being labeled a “pattern day trader” ; one other item on limitations to day trading ; you are only allowed to day trade up to 4 X your equity ; i think this means that for $25K equity(the minimum) you could day trade 100K in stocks;

          1. ted – The size of your position is limited to four times the the margin excess ($100k in your example). One would not want to approach that limit because intraday market fluctuation could nudge you into a violation. However, there is no limit on the number of times you could trade $100k intraday. Special situations include non-marginable securities which are subject to cash account rules, leverage ETFs reduce day trading power by the leverage factor, and short sales.

    2. Fan, no margin interest if you initiate a transfer of funds or sell something on the same day. Most of my short term trades are in IRA accounts so I don’t have to bother with taxes. In taxable accounts I only use margin to float bids and then I cover.

    3. There is no margin charge if you buy and then sell on the same day. If you hold a margined security overnight then you pay margin fees. The same holds true with shorting – there is no borrow cost if held overnight.

      If you’re going to trade in size, you need to trade where margin rates are much lower than 13.2 %.

      Yes, margin fees and borrow costs accrue over the weekend.

      More effort and risk than any reward? If you know what you’re doing, you can double or triple the yield in a decent year. 2008-2009 was the exception to this with much higher multiples.

      How do you maximize the profit from too long a margin charge period? If the trade isn’t working out, close it. Don’t become afflicted with Breakevenitis.

  12. Does anyone think Argo Blockchain ARBK will redeem its BB ARBKL at maturity in Nov 2026?
    P.S. I wouldn’t choose a stock symbol with BK in it.

  13. Was doing some research on (CIM) Chimera Investment Corp. 8.00% Series B Fixed/Float Cumul Redeem Preferred Stock; I have owned this security since it IPO’d 2/2017 and I thought they would call the preferred as it is to reset 3/30/2024 @ 3 month SOFR (currently 5.316% plus 5.791% or a whopping 11.107% (!). On the last earnings call I came across this Q&A
    Eric Hagen: Right. No, that does make sense. How are we also thinking about the fixed to floating rate preferred? I mean, it looks like that’s going to reset with this year. Do you think there’s situations or conditions where you might look to call those or redeem them as they turn into their floating leg?

    Phillip Kardis (CEO & Director): Yeah, I think we evaluate all those options. And I think as we mentioned right now, we think that with cuts coming in the future, at the end of the year and through next year, that — while the — we expect the floating rate to reset higher, we see that coming down over time and probably looking to deploy capital and buying new assets rather than at this point retiring that. But that’s a case-by-case, and fact-based analysis that we’re constantly looking at. So things could change and we could come to a view that it would make some more sense to actually start repurchasing it. But that’s part of the mix of how we think about deploying capital in new investments versus reducing that expense.

    Eric Hagen: Yeah. Thank you guys for the comments. Appreciate it.

    Anyone else here holding this preferred and have some salient thoughts or insight?

    1. Some recent writers on SA keep mentioning the discount to book value as a reason to buy the common stock. Who knows if the stated book value is an accurate reflection of the actual book value. If the ftf issue is not redeemed, I suspect it might be because the company either doesn’t have the liquidity to do so, or wants to piggy bank its funds in case things get worse. To me, it’s a risky purchase right now, but everyone has his/her own risk levels.

      1. Randy, thank you for your reply. This preferred B from Chimera is $300 million to redeem and the company stated it bought $1.4 Billion in mortgage loans so this preferred would be of interest; “In total, for 2023, we purchased $1.4 billion of mortgage loans. 50% of the loans were seasoned reperforming loans, 33% with DSR investor loans and the remainder were business purpose loans. We securitized $841 million of the re-performing loans and $475 million. The DSCR we called six existing deals and issued four new deals totaling 1.2 billion, enabling us to recapture 133 million, and we raised approximately $74 million from ATM issuance and have begun deploying the capital into high coupon non-agency securities, which we purchased at a discount, generating low to mid 10s unlevered returns and committed to purchase approximately $150 million of business purpose loans with mid-teen levered returns.

        1. AB—-you obviously are quite familiar with the company. Are you going to retain your position, add to it or sell it? I would be interested in knowing. I still own several mortgage reits preferred which are under water. None, I think, are in trouble but I don’t enjoy having the unrealized cap loss showing in my account year after year 😟

          1. Hi Randy, thank you for your inquire. I have no plans to sell my Chimera preferred at this time. I watch their corporate news and the annual/quarterly reports just to make sure they are operating in my best “interests” and my income stream they are providing is relatively safe.
            Wishing you peace, A

    2. A call would be a gain from here, I would consider it a good reason to own it. But I’m not expecting a call any time soon. I own CIM-C not CIM-B, doesn’t float as soon but when it does then it floats at a higher net rate and more upside to par.

    3. Hi Azure,

      I know CIM and have been in out and out over the years daing back to their IPO during the great financial crisis. I just have a feeling that these mREIT preferred fixed/float issues are going to get called in a big wave. I also doing think CIM is going to move first. AGNC or NLY might move first… a hunch. I also suspect that they have the interest rate risk swapped out.

      I have the NLY F and G issues, and for my part plan to hold them right up to the point when (if?) the Fed cuts. Then I plan to move to something fixed.

      It sounds like the CIM CEO is telegraping the he does not plan to call this issue. When you think about it his logic makes a lot of sense.

    4. Question on CIM.D/B coupon reset on 3/30/24. Are there further resets beyond 3/30/24 or does the reset coupon remain until called?


        1. TY…but 3m sofr changes almost daily…question is once coupon is reset, does it change daily/weekly/monthly/quarterly/annually or remain at reset level defined on 3/30/24 until called….? Quantum suggests an annual reset but not clear…

          “Stock will accumulate and be payable at a percentage of the $25.00 liquidation preference equal to an annual floating rate of three-month LIBOR plus a spread of 5.379% per annum”

          1. ” ‘Dividend Determination Date’ means the London Business Day (as defined below) immediately preceding the first date of the applicable Dividend Period.”

            Page S-19 of the Prospectus

            So this changes every quarter, which matches well with the 3 month SOFR rate.

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