Shakers and Movers Today-UPDATE

UPDATE–we should note that bargain hunters have come into the Washington Prime Group preferred. The WPG-I issue is up $1.45 and the WPG-H is up $1.34. This on fairly heavy volume of 40,000 and 108,000 respectively.

Honestly there aren’t many shakers and movers today in the income security arena, but as always there are a few.

Some of the shippers today are off in the 1% area–probably just normal noise. The Tsakos Energy Navigation 8.75% preferred (TNP-D) issue has been off 1-2% at $22.64 now. The Safe Bulkers 8% preferred (SB-C) is off about 1% at $21.75. Given the run these have had since the December lows a breather is in order.

Also we see the NuStar 7.625% fixed-to-floating (NS-B) is off 1% and is off $1.50 (6%) in the last 9 trading days–don’t know what is up with this one–doesn’t appear to have news or ex dividend dates affecting price. It is now at $21.11.

The new Energy Transfer (ET) is now trading on the OTC Grey Market and with 11 million shares trading is at $24.91–under ticker ETPEP. We are considering getting some of this to hold for a 1-2% rise in price–would only be a short term deal for me.

30 thoughts on “Shakers and Movers Today-UPDATE”

  1. Atlas Financial Holdings 6.625% Senior Notes due 2022 (AFHBL) continue to get crushed, down over 3% today and trading around $14 dollars. At these prices, its yielding almost 12% with a potential 45% capital gain if held to maturity. That is a lot of upside for the risk.

    1. This month it got a non compliance notice from NASDAQ, and also hired a financial advisor to them figure out their options as a company. Definitely fits that high risk/high reward investing bucket doesnt it.

      1. Grid, I got out the first day for around a 30% loss. It was a big surprise to me that a baby bond could drop that much but reading between the lines and this is just my opinion, I thought there may be potential for them to go out of business (especially as they did the same thing last year). This is why I never keep more than 1% in any HY securities.

        1. Sorry about the loss, Libero, but you keep the exposure small so it didnt hurt you too bad. These smaller and speciality insurers definitely have volatility in their pricing, so its always hard for me to determine a good entry point. So generally when I am of sound mind and body I try to stay out of the sector most of the time.

    2. CHICAGO–(BUSINESS WIRE)–

      Atlas Financial Holdings, Inc. (AFH) (“Atlas” or the “Company”) announced today that on April 5, 2019, as anticipated, it received a delinquency notification letter from Nasdaq stating that the Company was not in compliance with Nasdaq Listing Rule 5250(c)(1), because it had not timely filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (the “Form 10-K”). The Company timely filed a Form 12b-25 Notification of Late Filing related to the Form 10-K, which resulted in an extended filing deadline for the Form 10-K of April 2, 2019. The Form 10-K was not filed with the SEC on April 2, 2019, as the Company’s outside independent auditors advised that they will require additional time to complete their work. Nasdaq has informed the Company that the Company must submit a plan of compliance (the “Plan”) by June 4, 2019 addressing how it intends to regain compliance with Nasdaq’s listing rules. The Company will continue to work with its auditors with the objective of filing its Form 10-K as soon as practicable and will work diligently to submit the Plan promptly and take the necessary steps to regain compliance as soon as practicable.

      1. Atlas Financial Appoints Sandler O’Neill as Financial Advisor as Part of Strategic Review Process

        Business Wire Business WireApril 10, 2019
        CHICAGO–(BUSINESS WIRE)–

        Atlas Financial Holdings, Inc. (AFH) (“Atlas” or the “Company”) today stated that the Company is continuing to explore strategic alternatives, including, but not limited to, further strengthening its processes, reviewing its capital allocation and opportunities, a potential sale of the Company or certain assets, and balance sheet strengthening options.

        To assist the company in its review, Atlas has retained Sandler O’Neill + Partners, L.P. as its financial advisor. In this capacity, the firm will work on behalf of Atlas to manage the exploration and evaluation of a wide range of strategic opportunities with the goal of facilitating shareholder value generation.

        As previously announced, the Company’s Board of Directors have formed a Special Committee of independent Directors that will examine the conclusions and recommendations of this work and along with management provide an update by mid-year.

        About Atlas
        The primary business of Atlas is commercial automobile insurance in the United States, with a niche market orientation and focus on insurance for the “light” commercial automobile sector including taxi cabs, non-emergency para-transit, limousine/livery (including certain transportation network company drivers) and business auto. The business of Atlas is carried on through its subsidiaries American Country Insurance Company, American Service Insurance Company, Inc., Gateway Insurance Company, Global Liberty Insurance Company of New York, Anchor Group Management, Inc., and optOn Insurance Agency Inc. Atlas’ insurance subsidiaries have decades of experience with a commitment to always being an industry leader in these specialized areas of insurance.

        For more information about Atlas, please visit http://www.atlas-fin.com.
        Happy Holidays, Nomad

        1. Hmm…Sandler O’Neill was also the principal underwriter for the Senior Notes offering back in 2017. Makes me wonder if Atlas isn’t contemplating a merger or sale. That would certainly solve the problem for note holders!

          1. That was one of the options sited in the “presser”….

            Atlas Financial Holdings (AFH -1.3%) hires Sandler O’Neill + Partners as its financial adviser as it continues to explore options.

            Alternatives include, but aren’t limited to, further strengthening of its processes, reviewing capital allocation and opportunities, potential sale of the company or certain assets, and balance sheet strengthening.

        2. In 2018 Sandler O’Neill & Partners ranked #1 in Mergers and Acquisitions among All Financial Services with 82 deals closed. They are consistently on top the M&A leader board with number of deals closed per year.

          I’d be lying if I said I wasn’t tempted to take a position in AFHBL here, with the expectation that SO&P was called in to do more than handle a delayed 10-K filing issue.

          1. CW, I can certainly understand from a speculative investment viewpoint your interest in AFH. I did a bit more research to attempt to understand from a birds eye view the problem. Basically it appears there are 2 problems. One being the general nature of this speciality risk segment and developing a correct model to make money. But that is always ongoing…The second problem is their 2015-16 claims that keep biting them in the rear with higher claims than expected.
            And they still have over 400 outstanding from that period. The longer the delay the higher the settlement has been. So these have been big claims and they keep underestimating the projections of payments owed from these older claims. Thus they have to keep taking sizeable hits to the reserves. Just reading between the lines in conference calls, its still a Pandoras box.
            Definitely interesting and may be a good spec play here, if one is suited to such trades. The comprehension skills needed is way over my small cranial capacity brain, so I am not a player.
            That common stock price has sure taken a hit the past year…. AFH and CBL need to marry and have off spring. They could conceive penny stock babies. 🙂

            1. Grid, my plan is to call AFH and my contact at Sandler O’Neill on Monday to see if I can make some headway and understanding of the issues with AFH. Most insurance companies are cash flow machines and rarely file for BK unless there is great gross incompetence by management. Of course those reading this hopefully know that AFH would have to file for some form of bankruptcy before they can stop paying AFHBL http://quantumonline.com/search.cfm as these are notes. There is only 3 years left on these notes and the next EX date is in early July…Please do your own DEEP due diligence before investing.
              Hope everyone is having a great weekend, Nomad

              1. Nomad, please pass on what you hear….The notes are from the do nothing holding company, not the subsidiaries. The subsidiaries are where the cash flow is coming from (and of course the problems). The subsidiaries that feed the beast as mentioned in prospectus are under no obligation or responsibility to pay for this note….. Its all interesting stuff to me. Too bad its too complicated for me to fully understand.
                BTW, look how incredibly WEAK the credit ratings are from recent AM Best downgrades. This is the weakest rating AM has given that I have read. They are usually pretty soft raters. AM Best makes AmTrust look like a legal currency compared to Atlas.
                https://www.businesswire.com/news/home/20190320005854/en/Withdraws-Credit-Ratings-Atlas-Financial-Holdings-Insurance

                1. Grid, the AM Best ratings downgrade of AFH remind me of how soft and poorly run Phoenix https://nsre.com/index.html was and eventually was taken private and the rating and insurance business began to improve. You and I both are long the delisted 7.45% coupon Phoenix QUIP’s http://quantumonline.com/search.cfm?tickersymbol=PFX&sopt=symbolhttps://www.marketbeat.com/stocks/NYSE/PFX/
                  These are high risk securities and even the very best analyst and understand will not protect any of us from BK. Only money one us able to risk/lose should be “invested”. I know it’s shocking (HaHa), but companies actually deceive and inveigle to achieve their objectives…
                  We can evade reality, but we cannot evade the consequences of evading reality, Nomad

                  1. Thanks for the reminder, Nomad. More the reason I need to stay away. My small risk bucket overfloweth already with PFX, NSS, GLP-A, (Little) Power Reit

                    1. Grid, I am long 3 of the 4 you have mention:
                      (PFX) 7.45% Phoenix QUIBS due 1/15/2032 Notes; I will hold until I am no longer breathing or maturity; whichever comes first.
                      (NSS) NuStar Logistics L.P., 7.625% Fixed-to-Floating Rate Notes due 1/15/2043; I have flipped these so many times I cannot remember and am holding right now
                      GLP.A A very interesting 9.75% Series A Fixed/Float Cumulative Preferred Unit going EX early May and my plan is to hold right now as their last Q and last years K look very good and they do over $12+ billion of revenue but only $258+ million of EBITDA https://finance.yahoo.com/news/global-partners-reports-fourth-quarter-130000940.html
                      A sell above $26 and/or after the EX date may be in cards, but we look very good right now…
                      I do not own Power REIT, but you have explained their steady stream of long term contractual cash flow
                      ALL of these make life and investing interesting (maybe TOO interesting), Nomad

                  2. Nomad, I love a good little inbred company story like the Power Reit preferred…Have one employee who pays himself and board stock options, when he litigates he pays his wife who is an attorney. And when they need a little loan he uses one of his other companies to cheerfully provide the bridge financing….for a fee of course, lol…Lets keep it all house.

                2. Grid – I know I reviewed AFHBL about 2 years ago just about the same time I did AJXA from Great Ajax. Thankfully I rejected both. There was a time when I’d gravitate toward today’s Atlas, Medley, Maiden, and AmTrust types, but at 73 I’m feeling less frisky. Having said that, my experience of the years has been that the markets overreacts on distressed debt more often than not, so the risk/reward is really there… not always of course, but most of the time and frequently that’s caused by many institutions never wanting to show they own any so they’re more willing to dump at any cost than to be shown holding…. But my question to you on Atlas is where do you see any AMBest write-up on Atlas today??? Atlas Holding, Atlas Insurance, I see nothing to read at AMBest.com on either one other than the listings themselves and an NR rating on Insurance (not even that on Holding)

                  1. Ooops! I take it back on AMBest…. I thought I was logged in at the site and I wasn’t actually. Once I logged in, I see the write-up…. sorry ’bout that.

                    1. 2WR, I am too lazy to open an account, lol The above link I posted was March before the precipitous drop in the debt. I guess you noticed the fact Atlas withdrew the rating request? Too late… When AmBest starts throwing out CCC numbers, that is not a good sign is it… Doesn’t mean like you said, it cant bounce a couple bucks up real quick…real quick….But, Nomad slapped me around a bit on last post and reminded me I have my risk bucket full already. Im going to let others make the buck, as I am passing! 🙂

  2. HDO/Rida sent out a buy on the Washington Prime preferreds to the members. The herd rushes when this happens. It will happen again to a lesser extent when the article goes public.

  3. Tim, the NS Preferred B is surprising getting beaten up as NuStar (NS) is up YTD +34.45 and +36.96 1 year return. The NS.B has a 9%+ yield and will go EX at the end of May. Earnings are due:
    SAN ANTONIO–(BUSINESS WIRE)– NuStar Energy L.P. (NYSE: NS) today announced that it will host a conference call on Thursday, May 9, 2019 at 10:00 a.m. Central Time to discuss the first quarter 2019 earnings results, which will be released earlier that day. The conference call may be accessed by dialing toll-free 844/889-7787, reservation passcode 8288856. International callers may access the conference call by dialing 661/378-9931, reservation passcode 8288856. The partnership intends to have a playback available following the conference call, which may be accessed by dialing toll-free 855/859-2056, reservation passcode 8288856. International callers may access the playback by dialing 404/537-3406, reservation passcode 8288856.

    Persons interested in listening to the live presentation or a replay via the internet may access the presentation directly at https://edge.media-server.com/m6/p/t43p2xxs or by logging on to NuStar Energy L.P.’s website at http://www.nustarenergy.com.

    1. Nomad–I am watching it as it should (based on fundamentals) be trading stronger–in my opinion.

      1. I’m very long their note NSS, but will probably take a “B” shot after the earnings conference call.
        Happy holidays to everyone, Nomad

        1. Nomad, Im still keeping it small, but I bought some more NSS today at 25.07. Took forever to transact.

        2. NS common under pressure on large volume… like a bunch of new shares were sloshing around. I have a bunch of NSS and the only thing I’m worried about is a call. All MLP were under a bit of stress this week anyway.

          1. Not sure they will call anytime soon with amount of debt and ‘equity’ outstanding. I think you are safe and regardless a call wouldn’t hurt you at today’s price.

            1. Sorry read that wrong, think you are just concerned of losing out on the continuous nice interest payments due to a call. Still don’t think you have much to worry about.

          2. May have nothing to do with the price action of late, but NuStar has been named in multiple lawsuits regarding contaminated fuel sales – as well as commenting on some headwinds they are facing with some States who are making it a bit tough to proceed with pipeline plans.

            “At least five lawsuits filed in federal court last month accuse San Antonio companies Valero Energy Corp. and Nustar Energy LP of selling contaminated marine fuel that, in at least one instance, caused a ship to breakdown.” Yahoo! Finance

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