Well the new 5% term preferred issue from Eagle Point Income (EIC) is off and running. Why is an issue with a meager coupon of 5% trading strongly at $25.35? It’s the ‘term’, the monthly dividend payment, and quality that is a step above the other CLO peer group.
The ‘term’ of this issue–a mandatory redemption in 2026 will keep the share price from getting hammered too badly if (when) rates rise unlike perpetual issues. The monthly dividend payment–a bird in hand is better than 2 in the bush. Lastly the company owns mostly collateralized loan obligation’s debt tranches (versus riskier equity tranches).
Disclosure–I bought about 2/3rds of a position around $25.05.
The new issue from Hennessy Advisors (HNNA) was ‘teed up’ at eTrade and Fidelity on Friday–but I haven’t seen any trades. I want a little of this 4.875% debt issue (HNNAZ). Again the coupon is meager but maturity is 2026 so the share price will be more stable than a perpetual and assuming they don’t go belly up in 5 years the issue is ‘money good’.
The newest issue from Priority Income Fund (not publicly traded) is the 7.00% perpetual (PRIF-K). Trading at $24.75 three weeks after issuance exemplifies that this is a dog–we want term preferred–not perpetual junk. I am sticking to the term preferreds until they are all gone (called).
The new 4.25% perpetual (GDV-K) from Gabelli Dividend and Income (GDC) is trading strong–at $26 three weeks after issuance. As Gridbird advises ‘names matter’ and we all love Gabelli, although I didn’t buy this one–I love the name, but the issue – not so much.
Of course this week the redemptions continue. US Bancorp, Prudential PLC and First Bancorp all announced redemptions and late Friday Ken posted the OFS 5.95% call notice. I’m sure there are others–keeping an eye on the Reader Alerts page is the surest way I know to be able to scan for new issues, redemptions and lots of other pertinent information.