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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.

1,410 thoughts on “Sandbox Page”

  1. My CRLKP divy showed up at Schwab on 8/18 as of 7/01. I previously spoke with Schwab’s dividend research team and was told they had made an inquiry with the DTC which required an answer/reply within 14 days. I think DTC stands for Deposit Trust Corp, but am not sure. Who knows where the funds were for a month and a half?

    1. Randy Elyer, You are very close. DTC is the Depository Trust Company. You read all about it here:


      I ran into DTC after Charah Solutions was taken private back in the first quarter and missed the April payment on CHRB by 11 days and then missed the July payment by a little longer. Charah informed me they had made the payment to DTC, but DTC dragged it out.

      1. Everyone likes to blame DTC as they do not take outside calls from non-broker/dealers.

        Most of the time its either your broker or the company making a non-payment.

        1. Micahc, slight correction. They answer the phone calls, but arent happy when they find out its Joe Public on the other end of the line and wont tell you anything. I got their hotline number with which option number to punch and a direct line number too! If I get pissed again, I will call just to remind them somebody has these numbers ha!

    2. I hate that schwab records the entry for July 1 instead of for Aug. 18 with a note about it being “as of”. Makes it hard to see when late payments actually arrive.

    3. Who knows who f’d up? I did get an acknowledgment on 14 aug (posted previously, this is a duplicate) from Connie Jin, Senior Vice President, Corporate Development at SP+, that “we were made aware that there may be an administrative issue with the July payment. We are working with the trustee for this instrument, who is responsible for the distribution, to resolve as quickly as possible.”

      Mine finally shows up at TDA on the 18th as well.

  2. US Rig Count — still dropping

    * Total Rig Count ~ dropped for the 9th straight month to 642 total rigs.

    * Oil Rig Count ~ dropped to a
    17-month low at 520 oil rigs.

    * AAA gas price ~ $3.87

    1. Got a nice round of dividends from my E&P and MLP positions this week and coupon payments from Oxy and Enbridge. Even my laggard in the space (CHK) is perking up (in its own special way). Option spreads in WTI futures are generating theta decay with minimal adjustments.

      The thing that jumped of the page this earnings season was the fact that well productivity continues to increase allowing strong production in the face of declining rig count. The laterals in these wells are simply getting longer and longer, refracturing wells is a thing (particularly in the Eagle Ford). This allows for much more production per well.

      E&P firms are able to reduce Capex and maintain strong production while returning capital to common equity and paying down (not rolling over) debt.

      M&A activity in the space is quite strong. ET did a great acquisition and CHK finally dumped their remaining Eagle Ford oil assets. Oxy did a small deal in the carbon capture space. CHK is now a pure play on nat gas (for what this is worth…)

      My message to energy CEOs is a simple one:
      Keep up the M&A deals
      Keep buying back stock
      Keep maximizing dividends
      Keep buying back debt
      Keep laying down rigs

      1. I forgot to add a quote I heard in Houston once upon a time….

        “Please Lord, just one more oil boom – I promise I won’t blow it all this time!”

      2. As a retired income investor, I fail to see the value of stock buybacks. It seems to me, it supports higher stock prices which lowers the yield as a % of purchase price. I’d prefer any distribution as dividends, or am I missing something?

        1. There are two kinds of buybacks
          1)Buybacks that simply mask stock issuance for executive compensation.
          2)Buybacks that reduce share count executed at a discounted valuation.

          Type 1 is a waste of money.
          Type 2 is a tax efficient way to return shareholder value when coupled with an attractive dividend policy.

          Another attractive aspect of the Type 2 buyback is that excess free cash flow tends to be variable from quarter to quarter. Variability in share buybacks is much better tolerated by the investor community than variability in cash dividends (this should not be the case, but generally is).

          So I like attractive dividends simultaneous well executed buybacks. The oil and gas industry is loaded with companies returning capital to shareholders using this approach right now.

          My opinion for what it’s worth.

          1. I have never been a fan of stock buy backs – as I don’t believe they really move stock price appreciation for most companies. Stock prices are based on many factors beyond P/E. Emotion, current market environment, sector/vertical sentiment, competition, short sellers, and many more. Just show me the money – fat dividends and qualified, please.

          2. I suggest that there is a third type of buyback –
            3. when the CFO needs to reduce the number of shares outstanding to improve per-share measurements/reporting.

            Executives/boards watch their measurements and what they report to shareholders very carefully. If you are trying to show per-share improvement (EPS, for example), you can improve the numerator (increase earnings), or reduce the denominator (reduce the number of shares outstanding).
            The numerator is hard for a CFO to control, but fiddling with the denominator is within the CFOs control.

            Financial engineering 101.

        2. Buybacks can be good or bad depending on how they are used. Similar to
          retiring debt of any kind when it is no longer needed. Buybacks got a bad rap because some sleazy companies use them to artificially inflate stock prices without accomplishing anything of value. That doesn’t mean all buybacks are bad, they can serve a useful purpose.

        3. On fully mature businesses operating in an aging market. As the company can no longer expand due to monopoly problems occuring.

          Buybacks become a no brainer to retain investors as existing investors get a larger earnings share and also company can pay a sustainable increasing dividend overtime.

          Personally I am a fan of buybacks as long as the company is not issuing debt to purchase shares back.

          1. I’m still not convinced of the value of buybacks for someone who is mainly in it for the dividends. I understand now how reducing the number of shares allows for increased dividends, but that money could have been used to increase the dividend up front and let the share price seek its own level. Perhaps my perspective as an 80 year old is different from most younger investors who place more value on the bottom line.

            1. For stocks my main goal is not the dividends at all but for the price appreciation to outrun inflation which has been a hard ask in the last year.

              Hate the stock market but it helps me avoid the line for Alpo at Aldi.

              1. Wow. Price appreciation to outrun inflation IS a hard ask–in any year for me. I’ve never been able to do that in any meaningful way.

                Things got really better for me when I began to focus on a safe and growing income stream. That’s the beast I keep trying to feed. The key word to success, of course, has been ‘safe’.


                1. Camroc, I went pretty safe this morning. I made my first ever 5 year TIP purchase. Baby steps as I chose the Oct. 2027 maturity. About 2.2% fixed plus the inflation add on. This will beat inflation. But isnt going to get me that mansion on the hill!

            2. ok Jersey. Let me try to make my point once more.

              Let’s say management wants to return 75% of excess free cash flow to shareholders. This is a common goal in today’s oil and gas industry.

              Free cash flow will be highly variable each quarter, a dividend that is constructed to return 75% of free cash flow to investors will also be highly variable and will go up and down.

              Investors tend to punish stocks with highly variable dividends.

              So a firm might be better off returning say 25% of free cash flow in the form of a fixed dividend and the remainder of the excess free cash flow in the form of share buybacks.

              If this does not work for you, then that is ok too. It certainly works for me 😉
              These same firms typically have investment grade notes with generally good yields.

              1. And they do this even though there is now an excise tax on buybacks of 1% of the value of the shares purchased.
                That excise tax is like the corporate equivalent of the taxes on cigarettes. It could be 5% or 10% of the value instead of 1% and buyback activity wouldn’t change at all, because the companies that do it are hooked on it, for the reason above and the other is the massive dilution from that would result from stock-based employee compensation.

              2. There’s always supplemental dividends to take care of any extra cash flow beyond a sustainable dividend but that tends to rock share prices. As I see it, it’s a question of what is valued more: Dividends or price stability. Not that you can’t have both, but there seems to be some tension between the two.

            3. I think your reasoning is backward, or at least not tax-aware. If you are expecting to leave any taxable investments to heirs, you should be avoiding dividends and seeking capital appreciation to take advantage of basis stepup on death.

              1. My goal since retiring 18 years ago has been to live off the dividends/interest and never cannibalize the principal which has gone up since retiring. Works for me.

              2. David, It depends of course on many factors here. #1. If your heirs like receiving those interest and divy checks and not analyze on a regular basis the investments price appreciation for value, those monthly/quarterly checks are nice for them. And heck, in the end it is free money. #2. The basis step up doesnt apply to tax advantaged accounts. I think majority of investors with money have large 401k and traditional IRA’s because of working for companies and the annual limits are much much higher than Roth. Also Roth gets phased out. I have 12 years to retirement, and I am not eligible for Roth anymore. In fact it has been 7 years that I have not been able to contribute to Roth. Unless… you have large non tax advantaged accounts where you invest vs putting in tax advantaged accounts, or you are lucky to have a rich pedigree and are receiving years of inheritance from your parents, spouses parents, grand parents, etc.

                1. Mr. C, and then you have a few oddball situations like me. Yesterday I ran my SS through the WEP calculator and I am knocked down to $170 a month at 62. Does it really matter if I wait until 70? Its not going to pay for one decent steakhouse dinner and wine either way, ha.

    1. 2wr:

      I looked and the payment date is listed as today – typically etrade takes a day to settle on redemptions so I guess I have to wait till Monday!

      How much residual divvy did you get? Can you tell? I was calculating about 17c plus my avg buy was $24.91, so a total of 26c/share here. A few sheckels.

      1. 17 cents approx was what I was estimating too…. Received was .16146… dunno why the difference but not bothering to find out…..

        BTW, I see FRGAP is still trading today with about 600 shares changing hands… Go figure…

  3. Hello All – New to the site and I am doing a bit of research. Has anyone held their baby bonds through a bankruptcy? Does anyone have any data on the default rate and recovery value?

    1. Welcome, Patrick. I think you’ll find a whole lot of helpful people on here. That being said, I think your question is far too broad to be answerable per se…. In the end, there’s nothing about a baby bond that makes it a class in of itself…. It’s merely a bond, same as any other bond in the corporate stack. They, like other bonds, can be secured, unsecured, subordinated, etc. etc., etc. They of course can also be not a bond at all, but a preferred and one with its own priority in the stack as well. So a baby bond’s recovery value is dependent on the underlying company’s credit quality and of course, every company is different. That being said, the rating agencies spend a great deal of time and effort attempting to explain how they go about estimating projected recovery value ranges centered primarily around the ratings they assign to a company and each level of debt in their corporate structure… If you browse around their sites, you’ll find extensive details on their approaches… As a starter, try https://www.fitchratings.com/products/rating-definitions#ratings-scales and see where it goes… S&P and Moodys also will outline their approaches to estimating recovery values….Joining each is free. Of course, it’s more difficult to get a feel for what could be expected if your baby bond defaults and it is not rated. However, over time, you’ll get a feel for credit quality of specific unrated issues and their potential recovery value as well… Hope this helps..

      1. Many thanks for the insight. This is very helpful. Restated another way, given the perceived lower quality and loose indentures within many of these issues, I was curious if anyone has held through a CH 11 or 7 and came out with any value in the reorg or through the liquidation proceeds?

    2. I’ve been through three defaults over the years and never saw a dime. Consider yourself lucky if you get pennies on the dollar.
      Default rate tables are published in various places sometimes broken down by rating or sector or term or some other factors. They are not constant, defaults are low at times and tend to happen in waves due to economic factors.

    3. If you are researching this – I would look back at what happened during the GM B/K. This is a notable B/K and there were lots of baby bonds involved as I recall.

      I did have some GM baby bonds going into this, but quickly sold them. As I recall bondholders wound up with common in the new post B/K GM.

      This brings out an important point about Baby Bonds – they are more liquid than other forms of fixed income securities and easier to unload in a distressed situation (IMO).

      During this time I also had an interesting Ford Convert. Trust Preferred (a bond/equity linked mezz/hybrid investment). What was noteworthy about it is that the SEC banned short selling in financial firms (Ford qualified due to Ford Credit). So convrt arb strategies blew up causing dumping of this particular issue. One could pick these trust preferred shares at a very deep discount. I later sold these for par.

      1. This is helpful. Some of these lower coupon/longer duration issues that have traded down (due to lower yield) are roughly selling close to what a back of the envelope analysis would suggest is liquidation value. Obviously could be off on the credit analysis. Will take a look back at GM and kudos on the Ford trade.

      2. Well if I remember correctly, GM would not be a definitive one to research because Govt (not to be political) stepped in to the procedures, messed up/ignored BK law and arbitrarily raised labor’s position in the BK procedures, to the detriment of bondholders… My memory could be fuzzy but I sure remember getting p/o’d about Govt walking all over bond and BK law.

  4. Real Estate contagion fear from China escalating around the globe…

    * Developer Evergrande files for bankruptcy protection in US Court overnight.

    * Developer Country Garden having difficulty with bond payments…many major US banks have exposure risk with CG.

    * Zhongzhi shadow bank in trouble

    ** MAY have volatile Friday market session with 2.2T of option contracts expiring.

    1. If I read it correctly, Evergrande filed chapter 15 – trying to get US courts to cooperate/recognize that Evergrande is undergoing restructuring in other countries (Caymans, BVI, IIRC). Its not that common. Evergrande is not in BK in China, where most of its assets/businesses are.

      The Chinese gov. is working very hard to manage their real estate bubble. They know they have an enormous problem, but they don’t want the bubble to burst and cause a massive recession. Tough tightrope act. They are quietly forcing banks to do “unnatural” things to keep things propped up, and they are having healthier companies “help” out (even if they are not in related businesses).

      For people coming from a “free market” mindset, it is hard to grasp just how much the Chinese government can get away with.

      1. What do you think all the bailouts have been about?: Bankers wanted to foreclose on one million homeowners during the Depression the govt intervened, S&L/Silverado, Bear Sterns, Lehman, GM, Greenspan put, 2006-2008, Covid, ZIRP, Fed buying bonds /mortgages and extension of reserves/reverse repos…yep, it’s hard to believe how much a govt, and those who control the govt, can get away with.
        May be that a mindset is a carefully planned and guided doctrine from the top down.

  5. Q on CD accrual start date: I noticed Umpqua settled in 12 days,Merchants Bank 6 , and Zions Bank in 2. Very wide spread if they get to use the money and pay from accrual date.
    When do they begin accruing? Purchase or accrual date?

    1. I believe that CDs begin to accrue at the settlement date. That’s when the money is debited for the CDs. The banks that issue the CDs do not get the money until the settlement date, so there is no spread involved. The money should be earning interest from your cash account (where the money is coming from) until the settlement date.

      I have not seen the term “accrual date”, but it seems logical to assume that would be the same as the settlement date, since that’s when the CDs begin to accrue.

      I hope that is helpful. I also hope someone swoops in if my explanation is unclear or wrong. These terms can be confusing.

      1. You have to be careful with the term “accrual”. That is an accounting term that gets confused with finance and cash flow issues. What somebody accrues on their accounting books does not always translate to actual dividend/interest payment.


    VMRXX 5.28%,
    VMFXX 5.26%
    SWVXX 5.21%
    SNOXX 5.06%


    30Y FIXED…7.37%
    15Y FIXED…6.75%
    30Y JUMBO…7.30%
    5/1 ARM…7.17%
    30Y FHA…7.05%
    30Y VA…7.08%


    $3.875 Gallon

  7. BANX – ArrowMark Financial Corp.

    I don’t normally trust the data at cefconnect but it’s a good place to start for CEFs…. If you search cefconnect for stocks trading at the greatest discount to NAV, BANX shows up as having the 9th largest discount to NAV on their entire list of CEFs. BANX reports estimated NAV monthly and just released July NAV @ 21.55 UP from 21.29. They pay .39 quarterly with earnings last reported at .62/share per quarter in June… It’s trading at 16.62. Admittedly BANX is an odd duck in what they do, but it doesn’t seem to be worthy of such a huge discount to NAV share price of approx 22%……. Unquestionably DYODD but if odd duckiness and bank related does not turn you off, BANX seems cheap paying around 9.38% current.

    1. re Banks
      If memory serves me correctly banks has a rather complex 10K so check it if you are considering a buy and this could be a concern. sc

    2. 2wr-
      Looks pretty good to me- I had forgotten about it, deserves a better look. cefdata.com has pretty good info- coverage, etc. NAV has done quite well over the years.

      1. From their fact sheet-
        Unique investment vehicle dedicated to making investments in regulatory capital relief securities issued by large, global banks, and community bank securities
        ▪ Non-correlated, value-add non commoditized product portfolio
        ▪ Meaningful floating rate assets (~83%) may position the portfolio
        well for rising rate environment

        Emphasis on rising rates….

  8. WAFDP . . . Washington Federal 4.875% Series A … Callbl Apr 2026
    Currenly at $14.64 … ExDivi Sep28 … Pays Oct 15
    Any holders …. comments ??

    1. Jim, it’s been Lower. Take that in context. I know Grid for a while was flipping it. You need to DYDD and read their last report. Have they been borrowing from the Fed’s window? It’s non cumulative and at 4.875% and perpetual doesn’t seem there would be a lot of incentive for the bank to call it even in a low interest rate environment. If they don’t call at first opportunity it may float back to face value.
      I was watching it for a while, but almost all regional banks had a decent recovery since the March fall out. The question I ask, have you noticed a reversal in the trend with bank stocks? I have.
      So with them sinking back, how far will they fall?
      I have been watching another bank that said they did no borrowing from the feds and still had a decent qtr.

  9. Ford (F-D coupon 6.5%) is now yielding 7%. Trading at 7.7% under par. I am starting to nibble.

    1. Its in the lower 23.xx range now.

      I bought it last year in the 21.xx range and sold part in the high 24.xx range.
      I will buy when it falls more – which I suspect a UAW strike might precipitate.

  10. S&P closed below 50 day moving average yesterday, 1st time since March 28. We’ll see how that plays out in August.

    10yr currently at 4.22%

  11. HE ex divy tomorrow on common. Is there any way they can skip paying that declared dividend at this late moment?

    1. I haven’t read thei HE documents so I can’t speak to their particular divi, but I have seen cases where a board has “undeclared” a dividend before it was paid.

  12. I see a lot of general comments on Tim’s morning post about the market and the HE preferred. Tim had thought any weakness in the market today and the buyers would rush in. Kinda turned out the opposite. The talking heads blamed it on news out of China and that maybe true, but to me the threat of them lowering interest rates to support their economy doesn’t concern me except for a flood of cheap imports to compete with products here. Even lowering their rates isn’t going to help juice their economy unless they also flood the market with new money. This might devalue the currency and undo all their efforts to make it an international standard of value like the dollar.
    Second, someone mentioned that NI-B took a drop and someone else noticed an across the board drop in all utility stocks. I blame the auto bots seeing the drop in HE preferred and followed that with sells in utilities as a group.
    look forward to any suggestions from the group on solid ute preferred paying close to 6-1/2% or so that may get in the 7% range on a farther drop. As a second criteria, the next x-dividend date should be around end of Sept. first part of Oct.

    1. I was on a call with a couple of colleagues in China who “made the rounds” today talking to some of our contacts there. The consensus is that the Chinese gov. is continuing to vastly under report just how bad things are in their economy. Youth unemployment is off the charts, production is down, no solution to real estate bubble.

      1. Believe it was yesterday or the day before, I read in Bloomers firehose of disjointed info that it is now unwise to speak publicly of “youth unemployment” or even report the stats in Xilandia. … Wonder if the brain-trust over there is having second thoughts about restricting the idle males from playing computer games? Opium for the masses comes in many forms. Why wouldn’t a surveillance state not want an opium that pinpoints the location of the Young & Restless?

    2. @ Charles M

      It could be the bots, but it could also be a recognition by the market that there is increased vulnerability of utilities to natural –or man-made — disasters that was not priced in previously.

  13. Anybody else having trouble reaching Fidelity? I can’t log in online or on Active Trader Pro right now…..

    1. For the past day ATP Alerts have been saying it is a Microsoft update that is causing a problem. They say to update Windows to the latest patch and then restart PC

    2. Seems to be having trouble today. I was able to get into my 401k account today, but it took several tries to initiate some purchases of mutual funds.

  14. Initiated a quarter position in ATH/D this morning. At $15.90, with accrued divvy, it’s roughly 7.75% qualified. From Quantumonline, this looks to be IG rated (BBB). While IG spread is ~1.8%, this is nearly 3.5pts over 30yr treasury. Any reason I shouldn’t take this to a full position? Feels too good, which makes me wary. Comments appreciated.

    1. I will never again buy a preferred stock when there is no underlying common shares of the same identical company paying a dividend. In that situation, the company must stop paying the dividend on the common stock before suspending the dividend on the preferred stock.
      In this case, Athene is now owned by Apollo. They can suspend the dividend, or delist the preferred stock any time they want with little consequences. Some may feel this is a too conservative approach, but I do not trust private equity companies. I have sold my Athene preferred shares, and will not reconsider them.

      I do, however, hope this trade is profitable for you.

      1. @ donocash
        I think you might be overestimating the value of a stock having a common and preferred dividend. Case in point, CORR, which stopped paying the common dividend and the preferred, albeit cumulative, dividend at the same time.

  15. Picked up a partial fill of AUB-PA today at 21.20 I think in time to catch the ex-dividend 8-17 may flip before it settles just to see how Pershing handles that. TDA never slapped my hand for doing it over there. Also had a partial fill of CSWCZ fill of 369 shares at 25.05 Their 2nd qtr. report looked good.
    Goodnight everyone.

  16. File this under “where is that dividend payment?”

    CRLKP is nearly a month late with the latest dividend payment (ex-div 13 jun, due mid-July). Net net: got a msg from SP+ today acknowledging they’re late and saying they’re working on it (no ETA).

    More detail:

    Snewman posted in the Sandbox on 08 aug, asking, “Does anyone know if CRLKP (Central Parking Trust Debentures, which are now an instrument of SP Plus) had its July 1, 2023 interest payment distributed to holders?” (link to post is at

    I sent a message to SP+ IR and heard back today from Connie Jin (SVP, Corp Dev, SP+) that “we were made aware that there may be an administrative issue with the July payment. We are working with the trustee for this instrument, who is responsible for the distribution, to resolve as quickly as possible.”

    1. Bur, thanks for posting that. I reached out to the Connie Jin you mentioned, but I never got a response. It’s good you did get a response!

    2. You can add CHRB, Charah Solutions 8.5% Senior Notes to this file also. As of writing this the payment due July 31 has not showed up in my Vanguard account. It was deposited like clockwork until the April date, when it lagged by almost two weeks. I called Charah both times and had a good conversation with them. Both times a clearly frustrated person stated they had made the payment promptly to DTC (the Depository Trust Company) but something was delaying DTC. They stated repeated emails etc to DTC were not answered. I think they are being truthful as two different people there told me the same story. I personally think this has something with Charah being taken private early this year, but who knows? Anybody else who holds this seen any money this quarter?

      1. Fidelity received an interest payment for my CHRB on 8/14 so you may want to check your account again.

        1. Well, it is now posted in Vanguard with a date of 8/14/23. I had checked it after close yesterday, so it got posted between then and midnight. I wonder if this will be the “new normal” for Charah?

  17. MMF & 10YR…10:30 EST

    10YR ~ 4.2%

    VMRXX ~ 5.27%
    VMFXX ~ 5.26%
    SWVXX ~ 5.23%
    SNOXX ~ 5.07%

  18. See the Bloomberg article on filings in San Francisco to reduce property tax assessments , “San Francisco Prices Are Sinking, and Property Owners Want a Tax Cut.” One factoid: the Westin St Francis hotel in Union Square, a venerable landmark, currently has an assessment of $768M. It is seeking a reduction to $76M. Office properties are seeking reductions of 50%.

    Clearly, some owners are trying to take advantage of hard times and the insolvency of individual properties but claims of reduction still have to pass the laugh test to assert a credible claim.

    Just a little better off than owning a hotel in Kiev, owners of SFO hotels are hard pressed. It is said that rental car agencies advise their customers in SFO to leave the car unlocked and windows down to avoid damage to the car from widespread break-ins. I wonder how much the damage waiver costs these days?

    1. Potter, I went down To Daley City 3 weekends ago to buy a radiator off someone on Craigslist. I normally like to stop at a oriental housewares and hardware store on Clement but this time I decided against it.

      1. As I remember, Daley City isn’t very close to downtown or Union Square? Isn’t Daley City the original Ticki-Tacky neighborhood?

        Has the urban rot spread that far south?

        1. Clement Street is in the Richmond district of San Francisco…not close to Union Square downtown, but still affected by the rising crime and decay in the area. San Francisco recalled its DA last year, in no small part because residents of the Richmond district got fed up with the lack of criminal prosecutions including a few high profile ones. Great city…at least it was during the dot-com boom era.

        2. Yeah, his post didn’t make sense. Apparently he was driving from north of the city, and decided not to stop on Clement St on his way to Daly City (note spelling), which is supposed to be significant to us. Hard to believe it has anything to do with crime. And “oriental”, really? What decade is this?

          P.S. Please stop calling it SFO, that’s as bad as calling it Frisco.

          1. David, I had an appointment with the seller I had to make. Nice typical houses for that neighborhood. Front yard bigger than the backyard with side entry to backyard. Security camera, with dog and side gate had 4ft galv. 2×2 tube steel arch over 6ft gate for total 10ft height. Was tempted to stop at the asian hardware store on my return Northbound journey. On the map of San Francisco that part of Richmond neighborhood is known as little Russia. The Cinderella bakery makes a great Russian rye bread worth stopping for. My daughter lived about 6 doors down from the local police station for several years. Why I know the area. If I had been smart come to think of it I should of parked by the police station and walked the several blocks to the hardware store

          2. David

            Yes I remember Herb Caen’s ‘Don’t Call It Frisco.’ I lived in the Bay Area from 1955 to 1973 and loved it. My father went to Berkeley in ‘38 to ‘40 and said it was heaven even though he was raised in Texas. That was the past and neither city environment exists today. SFO is an abbreviation and , frankly, the city doesn’t deserve much respect. It shows no respect for itself and little will to survive. I am being terribly judgmental but the city needs a serious intervention.

    2. Seeking reductions in tax assessments on office buildings is not limited to San Francisco. (There are local governments whose tax revenues are going to sink on lower values, with possible implications for muni bond ratings.)

      A tax appeal is an appealing (pun) gambit, especially with office prices at rock bottom now. You get an immediate drop in taxes if you win. Plus a continuing one. Revaluations by assessors actually going out to the property are only periodic, maybe on a 3 year cycle.

      Its not unheard of for big buildings to have two values at the same time. One for the tax rolls and one for the lenders. Just my opinion.

      1. You would think they would immediately revalue a residential property based on an MLS listing for sale, since that is what the owner thinks the current value is… And they can revalue it every time the price changes, leading to an average valuation rate.
        It isn’t like the math is that hard and the data is readily available.

    3. nasty thing about valuation reductions in CA. We had an initiative that capped property tax assessments (prop 13, back in the 1970s).
      You can ask for a reduction, and if you get it, they can jack it right back up in any subsequent year up to your “prop 13” limit (what you were probably paying before the reduction) if they think property values have gone back up. Happened a lot after the mortgage crisis drove down prices/valuations.

      I don’t think its unfair, but it surprised a lot of people.

  19. Hawaii Electric

    Not sure if anyone owns these thinly traded preferreds but hearing they could end up with significant liability for the wildfires if their power lines started the fires. Lawsuits have already been filed.

    1. I trade in them and out of them based on yields and volume dumps as they always tended to rise in price and return to the current illiquid yield of all sister ute preferreds. But there is no relative value here in any of them presently even if there is no fire risk. So with this added on top of the equation, I agree. There is no benefit to owning a 5.5%-5.75% perpetual with this cloud, when you can get others at that yield right now if one was so inclined to own.
      Now if there is some massive panic dump, I may be a player again. But not here.

    2. Some detail on the legal ins and outs here:

      In search for Hawaii fires cause, lawyers probe power lines

      As a Luddite, what the modern technology found in the average household can do always amazes me, so I found this part of the story interesting:

      “Sensors that monitor power flow into households detected a major grid fault just after 11:38 p.m. local time on Aug. 7, about 20 minutes before a fire was first reported in Maui, followed by dozens of faults overnight, said Bob Marshall, chief executive officer of Whisker Labs Inc. The company’s plug-in household devices determine whether a fault is taking place on utility equipment through the magnitude of voltage swings. In Maui, the strongest readings came around Lahaina. ”

      FWIW, it seems to me that the next logical step is for your “plug-in household device” to beep out a warning like the alerts that come in over your cellphone. (Of course, like the average citizen I got “alert fatigue” and turned off all my cellphone notices.)

  20. TDS/USM and Moody’s

    Moody’s says TDS’s Ba1 rating is not immediately affected by the announcement of its strategic review of the UScellular business

    New York, August 11, 2023 — Moody’s Investors Service (“Moody’s”) said that Telephone and Data Systems, Inc.’s (TDS) Ba1 Corporate Family Rating and stable outlook are not immediately affected by the company’s announcement that it will initiate a strategic review of its UScellular business because it is uncertain what, if any, action will result from the strategic review. According to TDS, the strategic review will have no set deadline or definitive timetable for completion and there would be no assurance regarding the outcome of the review.

    There is a high degree of uncertainty surrounding the strategic review, including among other things (i) the number of strategic options at the disposal of UScellular such as a total or a partial sale, divestiture of specific assets, a no sale scenario, and / or partnerships, and (ii) the uncommitted time line. For example, should TDS agree to sell UScellular to another company or divest certain wireless assets (towers, spectrum, or specific markets), it could generate significant amount of cash, which TDS could then use to reduce debt, invest in other businesses or return cash to shareholders. Each of these alternatives could impact the TDS rating and outlook depending on the ultimate outcome.

    Headquartered in Chicago, Illinois, Telephone and Data Systems, Inc. (TDS) is a diversified telecommunications company with approximately 4.7 million wireless customers and 1.2 million wireline and cable connections in 32 states within the US. TDS provides wireless operations through its 83% owned subsidiary, UScellular, and conducts its wireline and cable operations through its wholly owned subsidiary, TDS Telecommunications LLC.

  21. Friday Tidbits…

    * Treasury Rates UP…30y 4.27%…10y 4.16%…7y 4.26%…2y 4.9%…6mo 5.5%
    10y rate now up 4 weeks in a row.
    * Nasdaq and S&P Down…2 weeks in a row
    * Dogs of Dow barking loudest…VZ 8.06%, WBA 6.59%, MMM 5.79%
    * US Dollar UP…102.87
    * US PPI UP…biggest increase since January 2023
    * US Consumer Confidence Down…down to 71.2 from 71.6
    * US Total Rig Count Down…9 months of decline, now 654
    * Oil UP for 7 weeks…Brent $86.70, WTI $83.18
    * OPEC+ Oil Supply Down…supply cut 1.2M BPD
    * Gas UP…$3.84 gal…highest Mono, CA $6.05 Gal
    * 30yr Fixed Mortgage UP…7.19%
    * TLT Down…retesting 2023 low, now $95.37
    * Social Security estimated 2024 COLA unchanged…3%
    * Car Insurance UP…17.8% yoy rise largest since Dec 1976
    * China’s largest developer, Country Garden, lost $7.6B 1H, now missed payments on bonds and faces default.
    * US Covid cases UP…Hospitalizations Up 12.5%, Deaths UP 10%
    * Suwalki Gap ~ NATO’s Achilles Heel for protection of Baltic States causing
    Poland to send 10,000 troops to protect this vital area from
    Belarussian/Russian forces this week.

    Have a great weekend!

    1. Newbie , did a quick flip of the KRP I bought and pocketed about .50 on the stock and have the .39 dividend Still have some core holding but I lowered my cost on my original purchase. Another 3 months to see how it goes. May regret selling these extra if oil stays up next dividend should be higher although hard to tell since they added a private placement of preferred stock.

    1. Volatility , VIX-wise, has been pretty much flat lining for quite a while in spite of various “end of the world / world shaking ” events. Debt defaults, a bad market in 2022, land wars, bank runs, droughts, real estate collapses, Fed activism, nothing seems to shake it.

      There is much discussion about why the VIX doesn’t move as much as it used to, with some saying popular new short term 0DTE options have obsoleted the longer-horizoned VIX. (” The future ain’t what it used to be.”)

      All this option stuff is above my pay grade. I guess the good thing is if you want to hedge your portfolio, it’s now very cheap to do so. DYODD.

      FWIW – Was not able to access the linked article.

  22. This is a curiosity question- as I have no position in Hawaiian Electric or the Bank of Hawaii. But is anyone concerned that the recent high winds hitting Hawaii have knocked over power lines and that the downed lines started the fires on Maui?

    1. Only in California where the polititians are looking for deep pockets is that a problem. 85% of all wild fires in the US are caused by careless people.

      1. Yeah, the careless people who let decades of fuel build up…
        Mediterranean climates need to burn every 6-7 years or the next burn can’t be controlled when it does inevitably catch fire next.
        The house I lived in CA illustrates this.
        It was built in 1963 in the aftermath of a bad forest fire that cleared the land, which was thickly forested, and made it cheaper for a builder to build a subdivision.
        It burned to the ground in 2012 in the next fire to hit the area.
        50 years of unabated fuel growth on the ground in a canyon is just a recipe for disaster.

        1. Justin,

          Sorry to year you lost your house.

          that is “natures law” about fuel growth California: you have to cut it, graze it or burn it – and if you don’t choose one of the first two, mother nature will choose the last one at the worst time.

          When I was a teenager, I spent a couple of summers fighting fires with my res buddies. Those California canyons scared the #%&$ out of us. Sometimes fire just explodes up them.

      2. William,
        I am not saying that it is the best system, but somebody has to pay for the damage when a utility starts a fire.

        CA says it is the utility (although our current idiot governor keeps finding ways to have the taxpayers subsidize it). Utilities carry big insurance policies because of it (although they could control their costs better by actually doing maintenance instead of charging ratepayers for maintenance and pocketing the funds as profits – but I digress).

        I realize that the CA system doesn’t require that the utility be found negligent, only that their equipment/maintenance caused the fire (so there is no decade-long lawsuit about negligence).

        I am curious – (question to everyone reading this) what would be a better system?
        -Have the taxpayers pay for it all?
        -Have every homeowner’s insurance cover it (which means that the homeowners pay)
        -Hold a lottery and pick a million Californians to split the bill?

        Just curious, because I keep hearing people complaining about the CA system, but I haven’t heard anyone propose an alternative (other than the trial lawyers who want to have a trial about negligence).

          1. PGE just released this statement last week.
            PG&E (PCG) reportedly expects to cut tree-related spending by ~$1B during 2023-26 as a result of discontinuing the program and other cost cuts, while it plans to increase its overall wildfire mitigation spending in the coming years as it buries more lines and takes other risk-reduction measures.
            Private, you are correct in its a hot potato on whose lap to shove the risk on . CA was just poking around a few years ago on changing the inverse condemnation law, and P&C insurers immediately started threatened to pull out or demand significantly higher rates. This is why things stay the way they are.

            1. After killing hundreds of Californians, PG&E has finally started to bury more lines and install better line control equipment. They are decades behind the other big utilities in California.

              I suspect the announcement you quoted will do wonders for their profitability – and it will only require killing a few hundred more ratepayers. After all, the program they are cutting only “resulted in a 13% reduction in ignitions”.

              Ironically, insurance companies are pulling out of CA anyway. Homeowners insurance is getting to be very expensive and the biggest insurers in the state (state farm and allstate) have completely stopped writing new policies.

              1. Yes, you are correct, insurers are pulling out of CA too from all the other risks. Which kind of reinforces the point it isnt just “utilities” causing the problem there. In fact the entire “bankruptcy” (how does one even call it a bankruptcy when everyone is made whole) process just reinforces the point the blames doesnt entire lie on PGE. Remember all the talk of a state takeover of PGE? That died down real quick, and Buffett (PacifiCorp) wanted no part of it when approached either. Ultimately, nobody wanted them, state didnt want it, and so she gets stitched backed together (for a second time in 2 decades) with no loss to bond holders and preferreds. With some common equity dilution being the only scar. And also ever higher rates…
                Meanwhile here in flyover country in my modest 1700 sq. ft home, I crank my AC down to 68 at night and 72 during the day. And even in the peak summer heat electric bill period, it never broaches $180 a month. Its not even worth the effort to program my thermostat, so I never have.

              2. After hearing stories about higher fire rates, I tore up a set of house design drawings that I had been working on for the Ca. central coast, and I began designing a concrete house (concrete floor and exterior walls w/ thin brick facade) with cold-formed steel trusses, which will also prevent damage from termites and high winds. It also provides a shelter-in-place location for our one-exit road development. Still working on details, and not looking forward to battles with building officials. At projected insurance costs, I should recover the added costs in 20-30 years by not paying for wildfire insurance (interior will have required fire sprinkler system). My neighbors think I’m insane (they may have a point), but the house could be very saleable in the future.

                I keep my lot (2 acres) and the surrounding 2 acres of open space cleared of invasive plants, which dry up by May/June and are the primary source for grassland fires. I let the drought-tolerant native plants grow w/o irrigation to add some year-round color and provide for bees, butterflies, and critters. This reinforces my neighbor’s insanity thesis, because they only mow/trim once per year in May/June when required by the fire dept, which frees up time for them to hit the gym. By that time, the invasive thistle, mustard, cheat grass, etc., have achieved heights of 3 to 6 feet, and mowing is a major event. I’ve lived in Utah and Hawaii, where people maintain their yards weekly (or shovel snow in Utah), and it’s odd to live in a place where people sneer at anyone that tries to responsibly maintain their property year-round.

                There are many things that could go wrong with my plan of quality construction and obsessively fighting invasive plants. But, while I frequently find it easy to blame climate change, PG&E, and insurance companies for the wildfire problems, there is a tiny voice inside of me that keeps repeating the quote “we have met the enemy, and he is us”.

                  1. Coaster – Thanks for the article. Good reading, especially the parts about windows. Using concrete, brick, and a metal standing seam roof, I’m certain that I can make a fire-resistant house, but the problem is the bureaucrats, not the materials.

                    It’s the central coast where daytime temps are usually less than 6o to 75 deg. so we don’t need AC, but we need a little heat in the winter. We’ve planned on numerous east, south, and west windows with a 2-foot overhang to block the sun in the summer. We plan on a sun room on the south side for heat gain in the winter.

                    If I use concrete walls, then I need an insulated interior wall, which I plan to form with cold formed steel for durability and the added fire protection. The energy code people hate the idea of metal studs and concrete because of heat loss, even though we will be entirely solar w/ heat pumps (heat, AC, and hot water), so they want combustible wood studs. They also want a sealed interior (no open windows) and spray foam in the rafters, which are bad for indoor air quality.

                    The developer, who is the head of the design review committee, wants abundant vegetation so he can’t see the houses, but this is bad for drought, fire, landsliding, erosion, and views from the inside. He also wants lots of vertical articulation on the house, which is bad for high winds and trapping flying embers. He hates brick, which lasts longer than the other materials with fewer problems.

                    The fire prevention people hate vented attics even with fire screens, even though vented attics are needed to keep the trusses from mold and rust. We could just vault the ceiling and have enclosed rafters, but that is more space to heat, cool, frame, sheetrock, and maintain.

                    The courts just recently shot down a plan to charge new-home construction to fund the homeless (our cost would have been about $30,000), because this problem is apparently caused by, and the responsibility of, only new home builders.

                    PG&E convinced the power regulators to charge solar a fairly hefty monthly fee if we install solar, which is required for new home construction. Apparently supplying our own power and feeding the excess back to the grid for less than 10% of the price that PG&E will sell it for is causing rates to increase for low-income families.

                    Concrete houses use more materials, which the green energy people hate, but they will last much longer. Not counting the roof, the basic structure will last 200+ years, while a wood-framed house might last 100 years with significant work. It seems that planning for the future is not allowable – you can only consider our immediate lifetime.

                    No matter what you do here, you are contradicting some other rule or goal, and there is a bureaucrat somewhere along the chain that will block you or charge you. Many of the rules by the bureaucrats contradict other rules by the bureaucrats. Everything they want adds costs, and then they will lament the high cost of housing in California.

                    1. Oh wow, my sympathies. Bureaucracy at its worst. Hopefully you can find some creative solutions and compromises to get past these issues. For instance, instead of concrete walls can you use a wide cement block with insulation blown/sprayed into the holes, plus stucco on the outside, to get enough insulation value without needing studs on the inside?

      3. It’s a problem beyond California. Pacificorp (owned by Berkshire Hathaway) is party to a class action suit in Oregon pertaining to fires in 2021. A “trial” suit on behalf of a small group of plaintiffs resulted in a decision on their behalf (I think it included actual and punitive damages of about $70 million; to be appealed I’m sure). That opened the door to a much larger suit that could force the company to seek protection, a la Pacific Gas and Electric. Class action lawyers in several other states have sued utilities for various forms of negligence (my view is there was no negligence and this is class action lawyers seeking deep pockets to pick). Some states are considering statute changes to insulate utilities form spurious lawsuits. But, the issue of a utility being sued and held liable for some form of tortious behavior, while starting in California, is pertinent elsewhere.

        None of this minimizes the tragedy in Maui. There should be “accountability” for what happened. With whom responsibility lies, I have no idea. But, Hawaiian Electric, is not out of the woods. I would guess right now, in some law office, attorneys are exploring who to sue!

        1. Talking to my customers and people who have family over there they were having high winds from a hurricane off shore. Combined with a drought they were having and yes the news did mention over growth of non native grasses on farmland no longer being farmed and maintained it was a recipe for disaster. Remember from a trip there in the nineties that pineapple farming was moving overseas and so was sugarcane production. Considering when they harvest the sugarcane they burn the fields that probably removed a lot of those grasses.
          Sad to say, Hawaii is the second biggest market for what I sell. If they rebuild, my sales will increase.
          Well not my sales, I gave the company 4 months notice I am retiring at the end of the year

          1. Congrats, Charles – 4 months notice – how bold and honorable, but it reminds me of what happened to me in my early, more naive days on Wall St. Much of Wall St compensation is dependent on the year end bonus moreso than the annual salary. With my second employer, while still young and naive, I decided to do the honorable thing – I gave 2 weeks notice, 2 weeks before the bonus was paid…. I was shown the door immediately and told if I do not want to be a part of the Kidder Peabody family, you’re not getting a bonus.. That was a great example of learning the hard way, something I obviously never did again.

            1. 2WR yes, I will probably not get the year end bonus which is usually 2,000 to 2,500 but I am still taking a 2 week vacation to Europe in Nov.
              I’m being asked to train my replacement which before would of bothered me. But any Newbie is going to need all the help they can get.
              At Corp it depends on if they like you. I have seen where they have asked some people to stay part time, ( which I considered)
              Maybe I am being naive, but outside the division manager and a Southern Cal branch manager I am the only salesperson.
              I wish them luck if they show me the door.

          2. very nice and CONGRATS! I myself am retiring from NASA on Jan 12 – it’s the best date to retire in “2023” due to the pay period setup.

    2. There was a story in today’s news noting that HE has an “aging and vulnerable infrastructure” (above ground, uninsulated wooden poles running through dense untrimmed vegetation). The stories suggest that the cause of the fires was HE’s electric lines (there was no lightning in the area and the fire started with several small ignitions, which is consistent with utility pole issues), although no cause has been determined officially.

      Utility says its wildfire mitigation plan is robust, denies that it should have done more. IMHO, litigation and costly grid upgrades are on the way.

      Career tip for utility executives: you probably don’t want to let the home town of a former commissioner of the State Public Utilities Board burn to the ground on your watch. It could hurt the bonus pool.


      1. Lived on the north end of Kauai for 3.5 years. All power lines along the highway and in the town of Kilauea are overhead. I first visited Kauai 22 years ago before the rapid residential development when it was still transitioning from cane fields and cattle grazing pastures. People developed residential properties, planted trees all along their lots, and allowed weak invasive trees (albizia, umbrella, etc.) to grow. it took years for the island to recover from Iniki in 1992. I designed and built a concrete house there, and I realized the roof would withstand hurricane-force winds up to 165 mph, but it would never withstand flying tree branches in a hurricane. Pre-hurricane winds knocking down KIUC power lines and sparking wildfires ala Maui followed by a direct hit by the hurricane would be hell. We left for many reasons, including hurricane risk, but I do miss Secret (Kauapea) Beach.

    3. Among the many questions raised in the PG&E lawsuit and, I think, in the recent Pacificorp litigation is “what was ignited” and who had responsibility for allowing the accumulation of a fire accelerant? Downed utility lines are dangerous and with capital investment, they can be “hardened” (nearby trees trimmed) or placed underground. But, a downed line may cause something to catch fire–usually due to drought or dry conditions coupled with strong winds. Who allowed the accumulation of dead or dry vegetation that enabled a fire to start and spread? In California, part of the answer was the State. If not the State, it’s private owners or a municipality for illogically permitting zoning to build in high risk fire zones. Is liability something that should be spread among a variety of parties or might it be a utility company’s alone? These issues are being litigated in several jurisdictions and, I suspect, there will be several outcomes.

      In Maui and Lahaina, all that can be said is that the result of the fire is horrific. How such a tragedy can occur in a community that was established 300 years ago is puzzling and, for now, impossible to ascertain.

      1. I saw reports from Maui residents who said the emergency notification systems did not work because the power went out, so that’s something needs to be addressed immediately. This is not the first time Hawaii’s alert system has been the source of major problems.

  23. Fidelity has a program now where you can loan out your shares of stocks. It changes how dividends are classified for tax purposes if they are loaned out over an ex-dividend date so not everyone will be interested, but apparently they give you a bump on the payment to help make up for the taxes. I am not sure if this is a new program they have or if I just never saw it before. I knew International Broker offered it but I don’t think Fidelity had it when I originally signed up many years ago. The ad for it just popped up today in my account window.

    I am going to look into it and maybe try it in my Roth account to see if it is worth doing. Anyone had any experience with these sorts of programs?

    1. I recently turned it on for my IRA accounts in Fido, and last month I received the first monthly payment for some utility bb bond, interest rate was 33% for 10 days. I guess it’s just a fluke. I had IB for years, and interest rate was mostly lower single digits, since IB will eat half.

      In IRA/Roth, I guess tax treatment won’t matter.

      1. Yeah, I wonder about the qualified dividend holding period for taxable accounts though.

        I bet it resets the clock so that would be a big downside. But I didn’t see anything which explicitly said that in what I read at Fidelity.

        1. Fidelity does mention it. and yes, it does reset the holding period. The
          From Fidelity’s page.
          “Another requirement is that the shares be unhedged; that is, there were no puts, calls, or short sales associated with the shares during the holding period.”
          “short sale associated with the shares” is the sec lending part of it because they can’t mean the investor, as that would cause a short-against-the-box situation, but likely means that the shares were lent out to a short-seller.
          And the calculations around who’s shares to lend out is fairly complicated, because it is a minefield filled with pitfalls.


    2. Different brokers have different programs.
      I used it at a broker that is now gone.
      At schwab, when I looked several years ago, they wouldn’t allow it on an account with margin. With margin, you have already agreed to let them borrow your stocks for free. They also wouldn’t let you do it with an IRA.

      Guess I might look again.

    3. Interesting program for incremental income. Worth a look. Items that stood out for me.
      – No restrictions on selling or pulling shares out of the program.
      – “Options positions written against a position on loan will be considered uncovered from a margin standpoint.”
      – Taxable accounts credited w/ ~27% to compensate for lost QDI. vs C-I-L.
      – No SIPC coverage on loaned securities. Fidelity is the counter party and posts collateral with a bank. (“The bank will serve as your collateral agent and hold your collateral in cash or cash-equivalent form.” Or some thing else similar , like CDs )

      Did not research “what happens to my collateral if bad stuff happens.” (“With respect to FDIC insurance coverage for cash collateral deposits held at the custodial banks, please refer to the Exhibits in the Collateral Administration Agreements entered into by Fidelity and the banks.”) Happy reading.



  24. I have today as the dividend determination date for ET-D (goes to float 8/15).
    I get a coupon of 10.36%.

  25. Daily Tidbits…

    * 30yr up 4.26%
    * 10yr up 4.11%
    * 5yr up 4.23%
    * 2yr up 4.84
    * Markets ~ initial early pop fizzled by close
    * CPI up 3.2% from 3.0%
    * Core CPI 4.7% from 4.8%
    * 30yr fixed mortgage up 7.14%
    * Gas up $3.83 gal
    * TLT down $95.59
    * Business bankruptcies up 23% yoy from 12,748 to 15,724 as of (6/30/23)
    * Covid 19 cases ~ up again with Eris strain 17% new US cases

  26. Question for folks here. BACKGROUND: Since rates have been going up this year a lot, I’ve been buying a lot of treasuries in the 5%+ area – started in January and focusing on 3-month to 1-year. Most then were zero to very low coupon bills/bonds. Lately, as those have matured, I have been laddering in (still in the 3-month to one year range) bonds with higher coupons from 2% upwards to almost 5%.

    My question here is, what do folks favor in this regard? Higher coupon/less discount or lower coupon/more discount? Even in the case of the latter, the “value” in the account rises with time as the maturity date gets closer. Anyway, just something I was contemplating this morning. I do not need the income at this point so there’s no need to generate near-term cash.


    1. Generally speaking YTM or YTW is the key variable you should be looking at. The discount or premium doesn’t matter that much, it’s really about which one has the best YTM/YTW. There may be some tax implications depending on the type of account.

      1. Yeah, I get that. I guess if one wanted some semi-annual income to use or invest, the higher coupon would be better providing cash before actual maturity. The hit to YTM is minimal.

  27. GMLPF – Issue has been crushed recently. Thought people where jumping on the row boats.

    Checked Aug 8, 2023 10-Q improvements across the board but will not know how new business model will perform until construction completed and revenues stabilize.

    I know shippers are not everyones jam but this seems severely mis-priced.

    1. Been putting in low bids on GMLPF trying to catch the next crazy dip. For a quick flip, too nervous to hold long term.

      1. Martin, Cut and copied the earnings call for NFE discussing these preferreds. Mike Patterson did his best to discuss the future of these and was shut out by NFE. Nice to read one analyst asking about preferreds. Notice also even MS analyst get stonewalled. Hope all investors of all preferreds email kudos to him.

        “Next, we’ll hear from Mike Patterson at Morgan Stanley.

        Michael Patterson

        My question is regarding your preferred shares on Golar LNG, the 8.75s. Some time ago, these were delisted. They’re currently not marginable. They can’t be solicited. They traded on the Pink Sheets. And I’ll give you an example. They traded about a 16% yield. Yesterday it was showing on the market about 14%. A trade went through at 11.5. And it just seems like quite a disservice to the shareholders of these preferreds to do that. Do you have any plans or what’s your comments on these preferreds?

        Christopher Guinta

        This is Chris. Why don’t you shoot me a note offline, and we can talk through this. We have put out this information publicly before and I’m happy to talk you through it. The financials are available. And we can go through it offline.

        Michael Patterson

        Well, with all due respect, for about three months, I’ve tried to call in, email and I never do get a return response on this. And so, can you address how come that they’re not listed? And would you consider listing these shares?

        Christopher Guinta

        Mike, so the shares are not listed. They were delisted when we took private the GMLP equity in 2021. We provide everything required for compliance with those shares. And we will continue to do so.

        Michael Patterson

        So you’re just fine with them trading at $0.45 on the dollar and it’s doing this to the shareholder. And like I say, I’d take it offline, but I can’t ever get a call answered, responded to at all. But it sounds like you’re just not going to do anything regarding them, right?

        Christopher Guinta

        Mike, we’re happy to look at what you’re describing. But we stay in compliance with those shares. And we provide all the information that’s required on a quarterly basis.

        1. Looks like he is doing a good job of demonstrating one of the things they teach you in executive school – ‘Don’t answer a question you don’t want to’ (part of “stay on message”). I briefly taught a module on this to new executives at a fortune 50 company until they decided someone from PR should teach it.

          Pretty funny to watch when reporters, interviewers (etc.)act like they have a right to an answer to the question they are asking.

          There was a great exchange I saw a long time ago on youtube (I wish I had a link). Young woman interviewer (seemed pretty green) keeps asking a question in different ways, and the executive keeps dodging the question and talking about something else (sticking to his talking points). Finally, the exasperated interviewer says “you are not answering my question” and the executive smiles and says sweetly “I know”. Hilarious.

          Often, the presenter’s steadfast refusal is enough to know what is going on.

          1. Private, I would respect weasels like this if they actually grew a pair and just spoke the truth. Something like. We dont want to disclose the financials to OTC, and we certainly arent going to pay money to keep them on an exchange. Hopefully if the situation occurs we can buy them on the cheap too.
            I like preferreds but they are not the end all now and there are options. Preferreds in general are not viewed as shareholders or stakeholders. Preferred shareholders are mostly viewed as the enemy once the IPO cash has been recieved. They are not percieved to be stakeholders and management does not feel beholden to them. Common shareholders have no use for them either and bond holders can add terms and covenants to put the screws on them too. And all basic strong preferred protective covenents of yesteryear are gone….Because they figured out people would buy them anyways.

            1. Gridbird, I bought some GMLPF last summer thinking it might be called in October of last year and boy did that boat not make port. It has lost a considerable amount and now it appears I am stuck with it. I have moved it right next to my other two unlisted ones ( LTSA and HMLPF) on my spreadsheet that may be there when I am put on the clay for my heirs to deal with. At least it pays 9.5 % on the cash I put into it. Like you said it would have been nice to buy GMLPF on the cheap at a yield of 16%, assuming I even wanted it…… I now have three of these turkeys’. I hope they continue to pay, Any thoughts on what may happen to these assuming the companies don’t go BK on me?

              1. Sorry, Dj, I am not knowledgeable on those companies financials. But what I have observed is this. Having a preferred jettisoned to expert market will permanently impair ones capital in terms of selling at a true market value. But it hasnt apparently affected a companies willingness to pay the dividend. The general rule of a company will still pay unless they cant generally applies.
                I only have one expert market and that was recently purchased (the old SJIJ under $13 a share). I just however from now on view it as an 11% annuity hold. Fitch actually rated SJI recently and nothing has changed. IIF is a good steward of the utes they own. And they were honest. They stated they would delist and one should assume they will be untradeable. That didnt happen as they wound up on the bond desk for whatever reason.

                1. Same here Grid with my one expert market stake in KTBA. An IG 9.2% annuity. Never even look at it.

              2. DJ, You didn’t ask but I’ll offer an opinion. Richard Lejeune on SA is well versed on this. He put out articles this last pmt will probably be the last. Rida disagrees. I think the answer to the question was in the NFE reply. Maybe Morgan Stanley has folks in this preferred; I don’t know why the analyst was asking but there must be a reason.

      2. Martin,

        I’m not allowed to place orders for GMLPF on TDA, how are you putting bids?

        Holding 300 shares that were purchased before the NFE mergers.

        1. Fidelity allows trading of GMLPF. They don’t show Bid and Ask numbers so you have to guess.

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