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.
Just a thought now about fixed to floating preferreds tied to a short term rate plus margin:
With the entire yield curve now positive— however slightly — we may find in 5 years that slope even normalizing toward a much further positive slope. Meaning: in 5 years the preferred plus margin may be the same as a 5-10 years treasury
RILYM has been discussed here several times with concerns of safety. With such a down day its interesting that RILYM was up $0.19 (.81%) today. It matures 2/28/25. Gamblers are sticking with it.
On the other hand, the other stressed issue, Sachem, experienced significant selling pressure. SACH-A finished down close to $16.. it displayed no bids at times. Scary stuff.. many on this board are wary of mREIT prefs… and this is a textbook case of everything that can go wrong. My gut says the baby bonds will have some value, but that isn’t a high confidence view.
Using a perpetual preferred issue like SACH-A with no call date for 18 months for comparison to RILYM is “apples to oranges”, and generally speaking you should not be comparing baby bonds with perpetual preferreds .
The “apples to apples” comparison would be with Sachem’s soon to be maturing baby bond SACC which closed the day only down .05 @ 24.84, or even Satchem baby bond SCCC maturing in Sept 2025 which closed down .38 @ 24.31. Of course these comparisons don’t support the point you’re stretching to make which might explain why you avoided using them. 😉
Good Morning Citadel – Apologies if I offended you. I was simply associating one troubled name with another.
Looks to me like we are suddenly in a negative feedback loop of rising rates and declining stock prices.
Given my opinion is worth about as much as the key strokes I’ve employed here, just consider it the ramblings of an old trader who sees patterns where none exist and who will say he doesn’t believe in patterns if he turns out to be wrong.
Fed ups 1/4%, maybe 2 more in ’25
10 yr up to 4.45%
Oops- meant cuts ! Doh….
And climbing… 4.49% while Powell is speaking.
bip.pra 5.125 perpetuals 18.28 now have current yield near 7%… the bip.pra/pff pair has gone from near 2 sigma cheap in december 2023 to near 1.5 sigma rich in october (3yr horizon) and seems to have rolled over…now near .5 sigma cheap.. I am expect continued underperformance
Still has $3.00 to go to hit it’s 2022 low. People have forgotten about the problems with commercial real estate thinking lower rates would save problem loans and distressed assets values.
With regard to the PRIF-G redemption:
I wonder why PRIF decided to redeem the G, and not the F. Both issues are currently callable and the same size, but the F has a higher coupon. In general what other considerations are at work here? Maybe because the G has only 1.5 years to maturity, and the F has 2.5? I would like to be able to place a bet on the the next likely redemption, of course!
Oh brother! SCCC due Sep 2025 and SCCG due Sep 2027 look like they belong to two different companies.
rocks2stocks – Yeah anything maturing in 2026 or later is starting to look like SACH common. BK pricing after 2025.
R2S….. For once iwas awake at the wheel and cut both Sachem and PSEC loose before they crashed. Good riddance to the two!
I think I read that the CFO resigned– that couldn’t have helped the declines.
Surprising absolutely no one, the Philadelphia Fed revised Q2 job numbers down from 1.12 million jobs added to 10,500.
I feel sorry for the Fed having to use such dodgy “data” in its deliberations. At some point, you might as well just use horoscopes to set policy.
Let’s see, the US was born on…
I will say this though, the revised numbers are a much better match for the job market my daughter saw coming out of college earlier this year.
That’s a hefy revision, person probably got a raise for doing such a great job with their jobs analysis. I guess being off a decimal place or two makes a difference. Shrug.
First, this was a headline from December 2022, not this month. So, that’s a lie. E.g., this partisan article.
https://nypost.com/2022/12/22/biden-administration-overstated-q2-job-growth-by-1-million-philadelphia-fed/
Second, the Philadelphia Fed’s model was wrong at the time, as was shown by the actual BLS data that came out a couple months later. So, that’s a second aspect of lying.
https://wolfstreet.com/2023/02/04/remember-the-hullaballoo-in-december-about-bls-overstated-jobs-growth-by-1-1-million-philadelphia-fed-oh-boy-results-are-in/
Yeah I should have checked my date so I apologize for that. My eyes are not what they used to be and when I Googled downward revisions I did not catch the year change and thought I was getting the numbers for the blurb I had read which came up in my newsfeed.
Here is what CNN says are the more recent numbers for the year I was trying to find ending in March 2024. https://www.cnn.com/2024/08/21/economy/bls-jobs-revisions/index.html
“The Bureau of Labor Statistics’ preliminary annual benchmark review of employment data suggests that there were 818,000 fewer jobs in March of this year than were initially reported.”
“The preliminary data marks the largest downward revision since 2009”
I will leave it to others to sort out what the actual numbers are (since I wouldn’t bet a plugged nickel on any of our government’s numbers), but Cervantes you need to apologize for saying I was lying. Not everything is tribal and we should strive to be civil. In that regard, thank you for the correction.
Scott, you are correct that there was a notable downward revision in August. That revision reduced the job numbers for the year ending in March 2024. Even after the revision, there were more than 2 million new jobs created during the period in question.
Revisions to job numbers are not uncommon. It is rarely trumpeted when there are mild revisions upward.
I am not apologizing for anything.
I’m not even involved in this kerfuffle. But I will say, that your response has been duly noted. When a person shows you who they are believe them.
PDPA
70476Q100 Pearl Diver Credit Co Inc 8.0% Series A Term Preferred Stock Due 12/31/2029. This looks interesting, but I can’t figure out if the dividend will be qualified. Anyone have an idea??
I found out. The issuing company is an RIC, and does not pay income tax. It is my understanding that and entity that does not pay income tax is not eligible for qualified dividends. So, this one is good for my IRA.
The CUSIP you posted is for the common. There is a posting about the Preferred.
But yeah, they are a BDC that has elected RIC status, so non-qualified.
Affliated Managers (MGRE) is effectively trading under PAR. The current price is $25.09 but it pays a 0.42 cent dividend in 11 days. The coupon is 6.75% and it is rated BAA1 by Moodys and BAA3 by S&P.
I brought more shares
good comment..mgre/pff pair is about where it was at inception in march 2024.. it signficantly outpeformed for one month but has given it all back ..low on pair was october
I bot TDS/PRU at 19.85 8.27 current yield.. the TDS/PRU and PRV vs PFF pairs have gone from all time low in may 2023 to near january 2022 high (nearly 4 sigma move) and has pulled back testing 200dma.. execellent article on S/A by Pacific Yield titled “U.S. Cellular and Telephone and Data systems: Preferred are still discounted” detailing material change for better in companies financials
I have been riding TDS/PV up and back down.. Thanks for the alert, I added a bit.
Re the 1st Qtr 2025 Schwab online Trdg tool over to thinkorswim ….
any Schwab clients already make the transfer and feel the TOS is better ?
Thanks ……
Jim,
I had some “transition sessions” with schwab for TOS. couldn’t make heads or tails of it. I think the “teacher” was just not very competent. She kept saying “just play with this and you will get a feel for it”. So, I guess that just means “trial and error”? I am not expecting detailed hand-holding, but I do expect someone to help me figure out how to configure the tool to look like something I can work with. I am going to have to try again and demand a different teacher.
Last email I got from schwab said the transition has been delayed until “after the tax season in 2025”, whatever that means.
Been using ToS for a few years – I really like it, for Options. If not trading options, I just use the website.
re: AGNB—some questions
1. How often are the reset dates? QOL doesn’t specify.
2. Did it switch from 3 month libor to sofr + 26 bp?
3. what is the current coupon?
Thanks
Whidbey-
What is AGNB?
I meant AQNB
Whid – Although QOL may not say directly, as always, the prospectus that it has a link to will and does…. “Starting on July 1, 2024, and on every January 1, April 1, July 1, October 1 of each year during which the Notes are outstanding thereafter until July 1, 2079 (each such date, an “Interest Reset Date”), the interest rate on the Notes will be reset as follows…”
Regarding switching to SOFR, I tried in Oct., ’23 to get a definitive answer from IR, but didn’t really get one…. However, their first payment upon floating did reflect an adjusted basis and it must have been based on something, with the likelihood of it being anything other than term SOFR being very low…. They also did provide me with a “Notice to holders re Benchmark Replacement…” as it pertained to AQNA – “Notice is hereby given that the Corporation has determined that the LIBOR rate has been discontinued and, in accordance with the definition of “LIBOR” in the First Supplemental Indenture, the Corporation has appointed US Bank, National Association as a Calculation Agent to determine a successor base rate. The Calculation Agent has determined that the 3-month CME Term SOFR plus a credit spread adjustment of 0.26161% will be the successor base rate, and the interest rate for the Notes beginning on October 17, 2023 until the next Interest Reset Date will be 9.341%.” Dividend payment on AQNB on 7/1/24 amounted to $.61253/share vs approx. .39 on its last fixed payment. It’s pretty safe to say they adopted SOFR for AQNB.
2wr—-thanks. I now know that I can access the prospectus in qol. Somehow, I forgot that or never knew it. I was thinking about placing an order at par in case it’s not called for a while.
Any owners of AGM prefs? I am trying to determine if the dividend is qualified. Quantum says it is, but I would like confirmation, as quantum has been wrong in the past. Thanks!
https://www.quantumonline.com/search.cfm?tickersymbol=AGM-F&sopt=symbol
Vanguard had mine as qualified
E*Trade/Morgan Stanley, IBKR and Merrill concur on the Qualified status of the dividends.
The trend is NOT our friend. The largest preferred ETF (PFF) peaked on 9/24/24 for the year. Since then, it has fallen -4.17%. For the year to date it is up +2.94%. If the descent keeps up at the same rate it will end the year at ~ +2.0%. All of this is on a price only basis and does not include the dividends that were paid.
Unfortunately, the canaries (low coupon, high rated) preferreds are currently sitting at a loss for the year of -2.23%.
Chance that buying a 5% CD on January 1 24 will outperform the highest quality bank preferred over the same period. NOT the answer we were looking for. . .
I know SLMNP is topic of conversations here- and down below, but with the offers of $848 to buy them back, why have there been trades up to 925 for the last couple days? And why would above 848 be a deal? I hope they can get to par- one can dream- if Fido would deign to let me sell mine. I’m getting to the point that I have no idea what they might allow/disallow.
thx
It’s been over 900 since September. Probably because of interest rate reductions. Apparently investors do not consider it high risk so they’ll buy the 6.5% net return. You should be able to sell it just guess at a limit order without benefit of seeing bid/ask. but good luck finding a phone rep who understand the buyback option.
Gary – Ask yourself this: Why would anyone buy any perpetual? You buy for the current yield and you accept the fact that you may never get your principal back again. Your theoretical downside is that it goes to ZERO with no safety net anywhere in the equation…. With SLMNP, even though your theoretical downside also is ZERO you have a very significant safety net on your downside because you can always sell it at 84.827% of its liquidation premium amount, assuming any path to BK is gradual… So you buy it for its current yield and with LYB being split rated IG, you might even be willing to pay a slight premium over the going rate of comparable perpetuals in order to own that valuable put option… Is 6.50% current yield competitive for a split rate IG perpetual? is it even more competitive knowing your downside is limited unlike other perpetuals? Then why not pay 920 knowing your downside is backstopped at 848? This is a bit of a simplification because SLMNP is not quite equivalent credit quality as its parent, LYB, but it’s that close imho that the CY differentiation ought to be minimal or offset by the put’s value.
Gary,I like that you used “deign.” VERY smart use here.
2WR states it very clearly.
I might deign to add that I would rate the preferred with the same rating that LYB carries for short-term securities, which is “P-2.” That’s because you have a long term security you can essentially convert to short-term at any time.
I don’t know how long it would take to receive the money if you put it to the company . At some point , I’ll find out because I can tell you I will get worried about it at some future point.
I wish I’d found this website a few years back. I’d own a lot more KTBA and SLMNP.
As a side note, if you open an IB account you can see the bid/ask which shows 845 ish bid and 920 to 935 offered depending on the time of day.
I have a bid for 20,000 SLMNP at $500 through a full service broker. I can’t believe they trusted me for a $10 mill order , but they did, and I’ll be racing around, margining everything and borrowing against my home equity to pay for that if there’s a flash crash in that security.
(if you think such things can’t happen they happen often enough due to order imbalances at the open or close of trading. I think it was the March 2023 options quad witching when Shopify gapped up $100 on the NYSE on a 300,000 share trade at the close. There are traders whose entire income consists of trading only on quad witching days)
LT, I usually love stories like this…. But… aren’t you afraid of the scenario where they declare bankruptcy and you can’t get the put triggered in time?! I mean.. shit happens, and sometimes it happens quickly!
Maine,
Right now it’s only about 1% of my portfolio.
The idea of “jump to default” is reserved for financials. Remember GE’s Immelt with a AAA rating, waking up one morning to find out the commercial paper market had stopped working and GE needed , I believe $12 bill overnight?
I suppose something like what happened with BP-the leak into the Gulf of Mexico could occur. Still, it took awhile for their debt to trade at distressed levels.
So, some concern , but not at my current ownership level. I’m shooting to own enough that I’m on the precipice of worrying. I guess that’s close to 10% but I don’t think i’d go above 5%. I always want cash to be able to take advantage of distress, and I hope that distress isn’t a crashing dollar.
I think I need more TIPS, actually, as they seem the better hedge for rising prices than gold or BTC.
I admit it’s lonely here at the bottom when I’m not making the returns of those in tech stocks
I actually did put SLMNP back at one time in the past and going by memory there was no delay in receiving funds. You just have to go thru Corporate Actions to execute…. and if you do decide to put them back, remember to do so immediately after dividend payment…. You’ll get no accumulated but unpaid dividend when you put.
2white.. good to know. You put it perfectly: “assuming any path to BK is gradual…”
Speaking of safety, what do you show as the latest YTM for the $25 Tennessee Valley issues? I trust you will get it correct, down to a basis point.
For TVE, @ 22.47 and 12/16 settle YTM = 4.868%
TVC @ 22.71 and 12/16 settle YTM – 5.066% FWIW, I added on to TVC on 12/10 @ 22.66 for approx 5.10% YTM
Even better- put them on the ex-date, still get the div and your $ sooner.
(Unless the brokerage plays dumb and delays)
NOT even better…… I’m not entirely certain that the company has to abide with an ex-div date if you put SLMNP back to them prior to actual payment…… I don’t remember for sure if I asked that question after the fact when I put them back, but I know I wouldn’t risk it now….
A year or two Fidelity sent a letter out about it too, so they should have knowledge about it.
Thanks for the reminder, JG – Here’s what Fido put out on 9/14/22 and it is still in place on their website – NOTE THE LAST SENTENCE:
Lyondellbasell Advanced Polymers Inc has announced an open conversion period on the Convertible Preferred stock.
Each Convertible Preferred Stock you own is convertible into 19.1113 shares of Shulman A Inc common stock, CUSIP 808194104. Holders who convert will receive a total of $848.2742 per preferred stock
($42.00 plus $2.386 ($1.477 distributed on 2/4/19 + $0.909 distributed on
04/01/19) in place of issuing the CVR per share).
Below is an example of the payment breakdown for holders who instruct one (1) preferred stock to be converted 1 Pfd share = 19.1113 common share * $42.00 = $802.6746 1 Pfd share = 19.1113 CVR * $2.386 = $45.5996
Total Cash Payment per Pfd share = $848.2742
CONVERTING HOLDERS WHO INSTRUCT BETWEEN RECORD DATE AND PAYABLE DATE WILL FORFEIT THEIR INTEREST.”
AQNB went ex-dividend today. Annualized 8.8%. Also announced was the sale of one of their businesses for 1.1B. I expect this to trigger a call. However, they also have another asset sale expected to raise 1.6B in cash. Use of the proceeds is to pay down debt.
https://investors.algonquinpower.com/news-market-information/news/news-details/2024/Algonquin-Power–Utilities-Corp.-Completes-Sale-of-Atlantica-Sustainable-Infrastructure-Stake/default.aspx
https://investors.algonquinpower.com/news-market-information/news/news-details/2024/Algonquin-Power–Utilities-Corp.-Announces-Its-Support-for-Energy-Capital-Partners-Proposed-Acquisition-of-Atlantica/default.aspx
https://investors.algonquinpower.com/news-market-information/news/news-details/2024/Algonquin-Power–Utilities-Corp.-Agrees-to-Sell-Renewable-Energy-Business-to-LS-Power-for-up-to-2.5-Billion/default.aspx
Speculation of when AQNB will get called comes up every now and then…. Below is what AQN has said in print in the past – p 39 of https://s25.q4cdn.com/253745149/files/doc_financials/2023/q2/2022-AQN-AR_Q2-8_10d.pdf – in the tiny little footnote # 2 – “The Company’s subordinated unsecured notes have a maturity in 2078, 2079, and 2082, respectively. However, the Company currently anticipates repaying such notes in 2023, 2029, and 2032, respectively, upon exercising its redemption right.” AQNB = the referenced 2079 issue so as of June ’23, they were projecting NOT calling until 2029 despite their ability to as early as 7/1/24
Of course that’s not cast in stone because as they say, they “currently anticipate….”. I’ve not seen any updates to this but it would be easy for me to miss if they did.
Yes but they changed this footnote when they decided to sell assets to pay down debt.
Ahah! You made me look it up, Steve, right you are – the most recent language merely says, “The Company’s subordinated unsecured notes have a maturity in 2079 and 2082, respectively. However, the Company currently anticipates
repaying such notes in advance of maturity upon exercise of the Company’s redemption rights in accordance with the terms of the applicable
indenture.” – https://s25.q4cdn.com/253745149/files/doc_financials/2024/q3/AQN-2024_Q3-11_7.pdf p 39 3rd Quarter 2024 Financial Report..
Hmm, this does make it sound like it will probably be called soon. I presume that AQNB has to be one of the higher rates they are paying on their debt?
I’m not that familiar with how calls like typically this happen after sales. If I understand right, it can be called at any time as long as they pay the accrued interest. But is there a norm to do this to coincide with a regular dividend?
And how long does it normally take from the sale of a subsidiary for them to actually having the cash available to use? Presuming it’s going to be called, what sort of timing would you guess at?
KIM-N update:
KIM extended the $62 tender offer an extra week, and the amount tendered actually FELL from 28% to 22%. How embarrassing.
Total shares outstanding of KIM-N now looks to be 1,440,228 (down from 1.85M before announcements of $62 tender offer).
Here is a little inside information for the folks running KIM:
If you want to truly get rid of this convertible security, up your offer to $65!
https://investors.kimcorealty.com/news-events/press-releases/news-details/2024/Kimco-Realty-Announces-Final-Results-of-Cash-Tender-Offer-to-Purchase-All-of-Its-Outstanding-Depositary-Shares-Representing-11000-of-a-Share-of-7.25-Class-N-Cumulative-Convertible-Perpetual-Preferred-Stock-and-Consent-Solicitation/default.aspx
Papa-
Mine have been sitting GTC 64.95- for a couple weeks now- no takers 😉
Which brokerage gets our money when we are gone?
From Bloomberg:
Robinhood Plays the Long Game by Betting on the Kids
The young brokerage positions for a big chunk of the coming generational wealth transfer.
Robinhood’s ultimate payoff, though, will come when its customers’ elders go the way of all things. The company estimates that over the next two decades, $84 trillion of assets owned by older generations will be inherited by younger generations, the largest transfer of wealth in history. It plans to be ready for when that happens. “Since Robinhood has more millennial and Gen Z active users than the other top brokerages, we’re uniquely positioned at the epicenter of this massive cultural and financial shift,” co-founder and Chief Executive Officer Vladimir Tenev told investors last week.
I have a very small account on RH —more like a pocket change piggy bank than a brokerage account. RH, IMHO, prospers with those young dawgs because it offers crypto. Maybe it’s all the younger group think they need, but could also be as they get older and wiser they’ll find that a tinker toy is not substitute for a set of tools to really build something.
FL Guy I want my piggy bank to be safe. How safe is it for RH to broker crypto? being a middle man and making a commission off buy and sell trades is fine but if something goes wonky will they go the way of Lehman Bros. or Paine Webber
Watch out if you have funds at Robinhood, first they at least months ago didn’t have a phone number you can call about your account. To reach them by phone you need to log into your account and request a phone call. My son’s account got hacked and he was locked out of his account so his only recourse was to send emails letting them know his account was hacked, couldn’t log in and request a call. After many emails to different Robinhood email addresses, they indicated his accounts were temporarily locked. After the lock on the accounts, they let over $100,000.00 transfer out of 2 accounts. They at some point realized what was happening and pulled some funds back in but not all. All this happened the day after the account was locked.
Fraud department determined that it was not their fault for any losses and would not provide any reason for that decision. However, after contacting someone outside the fraud department, who looked over the illegal activity that took place, they did the right thing and put the hacked funds back into the account.
Lesson here is they need better personnel in the fraud department.
Jaberstein, did your son ever figure out how he was hacked?
Charles,
Somehow the hacker got access to his email and when Robinhood sent him an email notifying him of changing his email and password he responded back that his account was hacked, but the hacker responded back though his email saying the issue was resolved. This went back and forth for a day before the hacker took a distribution from his IRA account and made multiple External debit card transfers from his trading account.
This was his only account that was compromised so not sure how the email access connected only to the Robinhood Account
Too bad about no direct contact by phone. I had read several years ago Robinhood runs with a minimal staff which is part of why they can offer low cost services.
You hear that kind of nonsense in silicon valley all the time. “we can run on less staff, and customers will pick up the slack because it will seem cheaper to them”. Fine, for some things – maybe not for financial companies holding a lot of money for people. No phone number? not even for the fraud dept? Who is advising this company?
IIRC, They got spanked for shenanigans a couple of years ago (?). Sounds like they need another (more expensive) trip to the woodshed to maybe learn the lesson that they need to act like adults if they are going to be in an industry as adults.
Whatever the outcome, I hope Jaberstein’s son files a complaint with the SEC and with FINRA – and maybe with an aggressive law firm.
Had no knowledge of this firm, how can they operate in the industry ?
J-
A better fraud dept is the lesson??
Question for nhcoast and others
Regarding the dividend determination date. It’s probably a trivial thing, but it has been driving me crazy.
Let’s take MET-A as an example. nhcoast has stated that today (12/12) is the dividend determination date. for MET-A. I believe that the first day of the dividend period is the dividend payment date. That would be 12/15. So, I would think that the dividend determination date would be the first day of the dividend period, ie. 12/15, moved to 12/16 because it is the next business day.
But, I do remember in the days of LIBOR there was this backdating of the relevant date of the dividend determination date two business days in London. So, do we automatically step back two business days from 12/26 (12/15 doesn’t count, because it is a Sunday), which would be 12/12?
So the question is, in moving from LIBOR to SOFR, was the two business days backdate incorporated into the move? Suppose London has a holiday that closes the London exchanges, but not in the US. Do we honor that holiday and backdate yet another day, if it falls between the first day of the dividend period and the dividend determination date?
dono,
I have assumed that, in moving from the 3 month LIBOR to the 3 month SOFR + 26 bps, the provisions specifying the “second London business day immediately preceding the first day of such dividend period” as the date for determining the dividend rates in the floating periods would be followed as closely as reasonably possible. However, I cannot point to anything explicit to verify this, and I am not an attorney, but based on my observations (speaking from memory), this appears to be what has happened in practice.
I cannot guess what would happen in your example when London has a holiday that closes the London exchanges, but not in the US. Might involve some litigation if that occurs.
30-year treasury futures made a low on Nov 18 and trended up toward the crossing of the 50-day moving average down through the 200-day moving average. I said recently that I was watching to see if the uptrend would continue above the moving averages. No, after stalling at the crossing, the trend has turned down and the 30-year yield is rising.
Is the small, new downtrend in 30-year futures a continuation of the larger Sep downtrend? Will there be a lower low, which would push the yield on many preferreds to new highs? Is the anticipated cut to the FFR on Dec 18 partly responsible for the rise in long-end yields?
With yields at the short-end falling, how any particular preferred stock responds to rate movements might depend on which end of the yield curve the stock is aligned. I want to take a closer look at the IG perpetual preferreds and other long-dated preferreds and baby bonds to see if they can be treated as a group and which ones offer the best yields.
I guess this is desk traded, don’t see it at QOnline:
FSK Completes Public Offering of $600 million 6.125% Unsecured Notes Due 2030
November 20, 2024
We are offering for sale $600,000,000 in aggregate principal amount of 6.125% Notes due 2030, which we refer to as the Notes. The Notes will mature on January 15, 2030. We will pay interest on the Notes semi-annually in arrears on January 15 and July 15 of each year, beginning on July 15, 2025. We may redeem the Notes in whole or in part at any time, or from time to time, at the applicable redemption price discussed under the caption “Specific Terms of the Notes and the Offering—Optional Redemption” in this prospectus supplement. In addition, holders of the Notes can require us to repurchase some or all of the Notes at a purchase price equal to 100% of their principal amount, plus accrued and unpaid interest to, but not including, the repurchase date upon the occurrence of a Change of Control Repurchase Event (as defined herein). The Notes will be issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.
https://www.sec.gov/Archives/edgar/data/1422183/000119312524259943/d707141d424b2.htm
Fdelity is obviously not posting orders in SLMNP to OTC markets.
I was 881 bid for 2 shares, and the stock traded around me at $875. That stock is subject to Reg NMS just as any other.
Fidelity reps are under the mistaken notion that you’re not entitled to a fill because of an incorrect notion that, for example in this case, the offer would be below my bid (or conversely the bid rises above your offer. This is NOT a correct application of REG NMS.
Only customer orders should be represented on Expert Market securities, so there’s no excuse for not sending the order to OTC markets for matching .
lt,
I am way out of my league compared to you.. but…
How do you determine if SLMNP is actually on the list of stocks that are part of the NMS for over the counter? I thought some OTC stocks did not have to follow ALL the NMS regulations… or maybe there is some rule that allows it to slip through the cracks like volume amounts.
It all seems quite technical to figure out if they are truly right or wrong.
I will pull up reg nms
lt,
I think i found it.
https://otctransparency.finra.org/AtsIssueData
weekly report – 10/21/2024.
report – OTCE
issue – SLMNP
12 shared traded in 1 total trade. If it is reported here I think it means it is part of the NMS list. But does it follow all the rules? Unsure.
I am doing this as an exercise to learn here. I really do not have anywhere as much knowledge as you do on these topics.
“That stock [SLMNP] is subject to Reg NMS just as any other”
I dont think Reg NMS applies to otc markets, which is why fills are hard and sometimes poor for all parties (except the market makers involved).
https://www.sec.gov/divisions/marketreg/nmsfaq610-11.htm
Reg NMS does apply to some OTC securities. Not all but a lot. On the FINRA website you used to be able to easily pull this data up but they no longer provide it easily. OATS reportable securities I think it is called for OTC securities.
I was 881 bid for 2 shares and 875 bid for 5. The 5 filled but the 2 did not.
The 2 shares were prior in both time and price. I probably shouldn’t have cancelled the 881 order as I no longer have a claim .
But, this should not have happened.
I’ve yet to dig into this, but there’s one thing of which I am certain:
No Fidelity rep knows the answer.
When I place an order for expert market with Fidelity they do nt represent the order …they don’t show it as a bid on my screen (using IB for quotes). When I place an expert market bid through Stifel, it gets represented as the bid on my screen.
Give me a few weeks and I’ll look into his around Christmas as I’m Jewish and like to act like Scrooge on Christmas.
My Hanukkah bush is displayed in the window of my house.
Thanks for the indulgence and I do not understand Reg NMS much better than anyone else. It came about toward the end of my trading career.
Back then I would have been all over this. I’ve become lazy in my advanced age of 65
My first guess is the order isn’t a protected quotation because it isn’t being represented as the best bid…which appears to be 847 ish.
LT, I have a bid in on a illiquid with Fidelity and several times I have wondered if they have actually put the bid out to the open market When I see sales that have happened.
Don’t get me wrong. I like the fact expert market exists. It’s an advantage to us.
lt – Please do explain how the expert market is an advantage to “us.” Who be us? When the concept of the expert market makes it difficult nay impossible for the “us” I know to bid on an issue, it leaves the “expert” the ability to knowingly low ball his bid because his expert status gives him the privilege of bidding with limited or no competitive bidders allowed. It’s tough at least for me to understand the advantage the expert market provides “us.”
Us being those with a brokerage account that is more for accredited investors. I am pretty sure I could do what LT is doing if I transferred over to Stifel but now I have to pay fees I am not used to. One probably needs a million plus dollars worth of assets with the broker and away you go. I have the feeling a sizeable amount of people here could do this as well.
You are now an “expert”.
I just read LT’s post in a good fashioned way. A more knowledgeable place like this forum contains a lot of people who could swing it if they wanted. Thus the use of the word “us”.
Does anyone know of another broker other than Stifel that allows someone to bid on the expert market solely by declaring themselves accredited? Point being I don’t think merely being accredited opens the door to becoming an “expert” at most brokers… I was surprised to learn of Stifel’s apparent exception if it’s solely based on that. I’ve not heard of any others.
I say Expert Market is an advantage because there is limited access. This is the type of thing that permitted me to be so successful as a trader. It wasn’t smarts so much as taking advantage of edges like access. For example when the uptick rule was still a thing, I could sell downticks by calling a hedge fund that did nothing but write 1-day OTC “bullets.”
A “bullet” is a married put–long stock , long deep in the money put. the 2 are direct offsets, but you could then take the long stock and sell it, and at the end of the day the put was auto-exercised leaving you net short. That was a huge advantage and securities lawyers assured me at the time SEC didn’t have an issue with it until they later did have an issue and it stopped. It wasn’t long till the uptick rule went away, only to come back on a limited basis during the GFC.
I’ve yet to find a broker that will let me place orders for whatever I want in EM. It’s a hunt I have not pursued well,
My account at Stifel started perhaps 7 years ago when I looked to see what broker was the lead manager for some unrated munis I wanted to own…they are infrastructure development bonds for Vegas -area residential master planned communities. Great investments because once developed you end up with 50 to 500x debt coverage. Secondary market purchases are what I seek there.
Anyway, I saw it was Stifel as sole bookrunner.
I started with perhaps $50,000. I later purchased an annuity through Stifel, . I never signed anything as an accredited investor.
Stifel will not permit me to buy most expert market including SLMNP. No idea why I can buy KTBA and PSBXP there but no others. I have to sign a form for each trade done and send it in. I’m paying 12 to 17.5 cts per share but frankly haven’t done that many trades. If I want to sell I’ll likely move the securities to IB or Schwab to liquidate.
My other expert market orders are through random full service brokers –none have filled–where I have almost no assets. truth be told there are only a few I want to own. KTBA is just a slam dunk as it’s a single asset trust holding a 7% T bond trading at 88 or 89 cts /$1 when the underlying bond trades OTC at 110-112.
I consider the high commission to be a cost of getting an order placed quickly and the price advantage is so great ….
but I now have enough KTBA and PSBXP unless the price drops.
Big bid for KTBA at $19.50 in case of a large seller.
BTW I talked to all the firms I used to trade with and none want to offer me access to EM alone as there’s no money in low volume trading.
If I were still trading 1 mill shares per day, they’d likely find a way.
I appreciate the full response, lt. “It wasn’t smarts so much as taking advantage of edges like access…” I feel like I did the same thing in my professional institutional muni bond trader days back in the early 80’s where my firm, for some reason or other, kept an unbelievable library of historical muni prospectuses in an old fashioned library setting that must have covered half the floor in our Wall St office building… That being desktop database days, it gave me an advantage on obscure muni names so I decided to concentrate on the 90% of all munis that 95% of all muni traders chose to ignore… It was amazing what you could find when you had access to the prospectuses your competitors didn’t have..
It sounds as though I misunderstood you regarding Stifel.. I thought you were implying they gave you access to EM because you were accredited… that’s not the case….. it sounds as though you. like the rest of us, only have access to bit hit or miss for SLMNP via Fido, right? That’s so non Nanny state of them, I wonder why?
Also can I assume your love of KTBA is based on its long maturity as a thrid party trust? You know there are similar ones that are backed solely by the underlying bonds of the corporate issuer, but most all are of shorter maturity…. You can search for them @ QOL using link Income Lists/Third Party Trust Securities…. I own GJH and GJO. Oddly, if you search via Income TABLES/Third Party Trust Securities, you don’t get the same list.
I’ve seen this behavior at Fidelity, too. A GTC bid on an illiquid seems to go stale if it doesn’t hit that day; trades will happen a day or two later at a price that indicates my bid should have hit.
Yes Steve that was what got me to wondering.
Next time this happens I am going to get to the bottom of it. Frankly I don’t care about 2 shares. I put it in merely so I’d get notified if the stock traded down.
Just of interest on my Google feed this morning. Abc news had an investigative article about Fidelity having a problem with multiple accounts opened under some customers accounts then money being moved to those accounts and transferred out of Fidelity.
Seems similar to a recent story about credit card users having multiple people put on their credit card without their knowledge. The Fidelity problem goes back to September. This may have already been posted about?
For those of you keeping score at home, I show today as being the dividend determination date for the following floaters:
CUBI-E
CUBI-F
GLOP-B
GLOP-C
MET-A
ZIONL
ZIONO
ZIONP
There may be others out there, I don’t know.
I show the 3 month SOFR today as 4.3586%., as compared to the 4.9466% being used for the current dividend. The annualized reduction in the dividend is about $0.15.
Got a question about a bond I hold, South Jersey Inds, CUSIP 838518AA6, that I bought back in the days Gridbird was present after some discussion. It is doing just fine in my sock drawer. It is my one corporate bond that I hold.
However I periodically check up on it FINRA bond page and see that the price of it per the graph periodically goes to zero! Right know I have the graph set to one year and I see 5 occurrences where the price has plunged to zero. The dates of the plunge aren’t consistant. Does anyone have any idea why this happens?
dj, my assumption is that it is just a data feed issue, nothing to worry about. I own a lot of that bond.
for instance, the price chart shows zero for December 6, but if you look at the actual trades (link below)… no trades were done at zero on that date!
https://www.finra.org/finra-data/fixed-income/trade-history?symbol=SJI5156685&bondType=CA
Thanks…. I thought it was a glitch somewheres. I bought this after Gridbird and I had discussed it. Been a good one for the sock drawer. Maybe one day Gridbird will show back up as I miss his postings.
yeah, I learned about so many issues from Grid. in fact, it’s the main reason I joined this board, but am glad he pointed it out.. can always learn more.
Honestly I am a bit surprised Grid is not back yet. So stubborn. 😉 He must be getting bored of so much golf by now.
Agreed with all . . . Hey Grid, we know you’re out there on the front nine, come on back and let us know that you are proud what your ” kids ” have learned !!
Christmas is 24 days away ……
Folks, I recently had a newspaper appear in my driveway. At first I thought it was a mistaken delivery, but soon was informed that it was a Christmas present! I haven’t read a print newspaper in decades, but used to read one during breakfast / coffee. I am now reading the Wall Street Journal six days a week! Glad I am retired as it takes some time to read it. Lots of interesting articles. Just read one about a company I had not heard of in New York City, SL Green. The article was about the rebound in the New York City Office market. It is not across the board as the premium buildings are filling up while the run of the mill ones are still suffering. I think reading the WSJ may help me in investing. Lord knows I can always get better…….
I have fond memories of the Wall St Journal. Sitting and taking a few puffs of a joint and then smoke a cig at the ripe age of 17 on the porch in the morning during the summer before driving down to work on the river at my fathers restaurant.
I worked on the dock as the cook where people could sit and have a burger, chicken sandwich, salad, and beer/cocktails. People could dock their boat to have lunch or dinner before heading out to Lake Huron (Saginaw Bay) or back home. The main restaurant was up above from the bank of the river.
Reading that super fine print to see what stock did what. I still regret not buying Toro or Ecolab I suppose and just holding it when I was old enough. Yet a kid never had enough money back then it seems when you hit college. They always had some good articles to read that were of higher quality then my local paper.
To this day, a delivered paper subscription, is a Christmas present to my father. I read it when I go visit my parents during the summer.
Welcome to the WSJ, I have been reading a paper copy for 45 years. I continue to love flipping through the pages, you never know what might pique your interest.
BXSL BDC FYI: Blackstone Secured Lending Fund Prices Public Offering of $300.0 million 5.350% Unsecured Notes due 2028
https://www.bdcinvestor.com/bxsl/202412/blackstone-secured-lending-fund-prices-public-offering-of-300-million-5-350-unsecured-notes-due-2028/
It’s an add-on to previous 400mm shs– see reader alerts yesterday.
Box spreads (either side)
Has anyone recently sold one to raise cash or bought one as an effective Treasury replacement, especially if you have large carry forward losses; these are great tools to use as your gain is then 100% tax free vs. getting income off a T Bill or other bond.
Where are you landing (minus commissions) on your fills with respect to the implied interest rate, not what you are seeing as mid range for quotes, but actual executed trades?
Noticed in a bunch of high credit quality BBs and perpetual preferreds, we are getting another leg down here in price and yields are perking up again. A couple even trading near 52 week lows and we are talking yields in the 5.7%-6%+ such as Southern Co, Duke Energy, Prudential, DTE Energy, Brookfield, MetLife, Public Storage, KKR Group, Carlyle, etc.
2025 going to be a very interesting year in fixed.
Thanks for mentioning companies I actually own.
I haven’t done any lately. I suggest you not rely on rates seen on boxtrades.com as they are not properly calculated. Use the free chrome extension offered at syntheticfi.com.
That site also shows yields being offered and bid in the Complex Order Book.
Synthetic Fi has turned box trades into a business.
Let me caution you on the tax treatment as I have seen CPA’s opine that the gains and losses should be reclassed as ordinary income. Google around to read why but I think they are right.
Practically speaking, unless you do a bunch of them and get a full audit from a sharp examiner , or it becomes a big issue for IRS, nobody will dispute the reporting the broker provides
Just thinking out loud here – for alternatives – if you are looking to sop up large carry forward capital losses, you could sell a winning position then immediately buy it back. The wash sale rule applies to losses not gains. You would end up with the same stock in your portfolio at a higher, stepped up, basis.
Question about RC-C the busted convertible, not the BB.
Is it truly busted, or is the conversion so out of the money that no one would actually convert? AND, can RC force conversion? I’m having trouble calculating the actual conversion amount. The original Anworth (ANH-B which became RC-C) issue had a floating conversion amount that was tied to the common dividend when the dividend exceeded the 6.25% preferred coupon. When RC took over, it seems that maybe the conversion amount was roughly 1 common share + about $4 in cash? But those numbers don’t jive with the closing price at acquisition (roughly $14 in Mar 2021 – they state the original conversion amount would be roughly $23.80).
I’m pretty close to just selling and accepting the capital loss, but thought I would reach out and see if anyone else had tried to research this and if there is a way to come out better than just dumping the shares into the market. (I have grand visions of an MSEXP scenario)
Subject to and upon compliance with the provisions of this Section 6, a holder of any share or shares of Series C Preferred Stock shall have the right, at its option, to convert all or any portion of such holder’s outstanding Series C Preferred Stock (the “Conversion Right”), subject to the conditions described below, into (i) an amount in cash equal to $3.7963 per share of Series C Preferred Stock (the “Conversion Cash”) and (ii) the number of fully paid and non-assessable shares of Common Stock initially at a conversion rate of 1.0505 shares of Common Stock per $25.00 liquidation preference (the “Conversion Rate”), which is equivalent to an initial Conversion Price of approximately $23.7981 per share of Common Stock (subject to adjustment in accordance with the provisions of Section 7). Such holder shall surrender to the Corporation such shares of Series C Preferred Stock to be converted in accordance with the provisions in paragraph (b) and (c) of this Section 6, as applicable.
https://www.sec.gov/Archives/edgar/data/1527590/000110465921038622/tm2110067d2_ex3-7.htm
Yes, that’s the paragraph that confuses me. In order for the initial conversion price to calculate, the shares would have to been trading at or around $19 and change. I don’t see any pricing that approaches that level at any point in or around March 2021 (trades in the 13, 14, 15 range). Maybe I don’t understand how this calculation works.
Plus, there still seems to be a floating exchange rate (subject to adjustment in accordance with the provisions of Section 7) in effect based on common dividends which I can’t make heads or tails of the language and formulas.
Anyway, at today’s common share price of $7.30 *1.0505 + $3.79 I get an amount of $11.45. Even with some floating adjustment, I don’t think I come close to the current $18 – $19 where RC-C has been trading, and certainly nowhere close to my $23.50 cost basis.
Correct. No free lunch here.
The adjustment amount is based on how much return of capital they have paid on the common since they was published.
Thanks Justin.
I still have many questions, but will attempt to do a little more research on my own. But if the community will indulge me just a little more…
1) Is there an easy way to get a handle on what the current conversion value would be for each preferred share? Would that info be available in the quarterly reports? Other filings? Or would I need to reach out to investor relations and have them calculate it for me?
2) Is this a particularly complex convertible, or do many convertibles have these floating calculations? I’ve not really dabbled in convertibles, so this is new for me – even though I’ve owned these since late 2021, and have no memory of why I purchased them in the first place. 🙁 But with the recent new issue and some related discussion on here, I started trying to figure this thing out, and realized how little I know about these shares.
I’m working on keeping better notes 🙂
Wasn’t the convertible issued by a predecessor company, and it just converted to ready with the same terms?
that is why it was so out of whack with the current price at the time because it was based on the prior security
I opened latest 10Q via SEC.gov, did a CTL C for “conversion” and found the snip below. BTW, there is a new short report on RC on SA but the assumptions are asinine.
The Company classifies Series C Cumulative Convertible Preferred Stock, or Series C Preferred Stock, on the balance sheets using the guidance in ASC 480‑10‑S99. The Series C Preferred Stock contains certain fundamental change provisions that allow the holder to redeem the preferred stock for cash only if certain events occur, such as a change in control. As of September 30, 2024, the conversion rate was 1.5792 shares of common stock per $25 principal amount of the Series C Preferred Stock, which is equivalent to a conversion price of approximately $15.83 per share of common stock. As redemption under these circumstances is not solely within the Company’s control, the Series C Preferred Stock has been classified as temporary equity. The Company has analyzed whether the conversion features should be bifurcated under the guidance in ASC 815 and has determined that bifurcation is not necessary.
Justin, yes, this was originally an Anworth series B. When RC took over, they changed the name to RC-C, but left all the previous provisions in place.
Maine, thank you. That was exactly the information I was hoping to find.