While we do not cover ‘equity units’ (in this case a 10% share of a $1000 convertible preferred and a purchase contract) at this time it is interesting to note that Stanley Black and Decker (SWK) is selling an offering of $100 equity units.
The interest in this issue is that again we have some snoozers as the company has stated their intent to call the SWJ 5.75% Jr Sub Debentures which have been callable for 2 years.
This time holders only got nicked for 50 or 60 cents. If this were a week ago they would have got hit for near a buck.
Once again the lesson is that if you hold an investment grade (especially investment grade issues with coupons over 5%) you need to be watching closely.
Thank to mcg and 2whiteroses for pointing this one out.
Speaking of which (equity units), DTP equity units (DTE ENERGY CO 6.25% PFD CORP UNITS CONV PFD MTY 10/01/25 CPN 6.250% DUE 11/01/25 DTD 11/01/19 FC 05/01/20, CUSIP-233331842) started trading yesterday.
Thanks wedgehead–hopefully I will start covering these this winter.
Sure no problem Tim, anytime. Very welcome news that these will probably be receiving coverage on your already-excellent site.
I don’t understand these units. If you would have a second and could explain them a little I would appreciate it.
Thanks
Jeff
JB, have you read this from Quantum Online: https://www.quantumonline.com/search.cfm
Stanley Black & Decker, 5.750% Junior Subordinated Debentures due 7/25/2052
Ticker Symbol: SWJ CUSIP: 854502705 Exchange: NYSE
Security Type: Exchange-Traded Debt Security
QUANTUMONLINE.COM SECURITY DESCRIPTION: Stanley Black & Decker, 5.750% Junior Subordinated Debentures due 7/25/2052, issued in $25 denominations, and maturing 7/25/2052. The debentures may be redeemed any time at the company’s at a Make-Whole Call of the Treasury Rate + 50 bps plus accrued and unpaid interest, at a par call on or after July 25, 2017 at $25 plus accrued and unpaid interest, at a Tax Event call prior to July 25, 2017, at 100% of the principal amount plus accrued and unpaid interest, or at a Rating Agency Event Call event prior to July 25, 2017, at 102% of the principal amount plus accrued and unpaid interest. Interest distributions of 5.75% per annum ($1.4375 per annum or $0.359375 per quarter) will be paid quarterly on 3/15, 6/15, 9/15 & 12/15 to holders of record on the record date which will be will be the close of business on the business day immediately preceding the applicable interest payment date (NOTE: the ex-dividend date is one business day prior to the record date). The company may defer interest payments on the debentures for one or more periods of up to five consecutive years. Distributions paid by these debt securities are interest and as such are NOT eligible for the preferential 15% to 20% tax rate on dividends and are also NOT eligible for the dividend received deduction for corporate holders. Units are expected to trade flat, which means accrued interest will be reflected in the trading price and the purchasers will not pay and the sellers will not receive any accrued and unpaid interest. The Notes are unsecured and subordinated obligations of the company and will rank junior to all existing and future unsecured and unsubordinated indebtedness of the company. See the IPO prospectus for further information on the debt securities by clicking on the ‘Link to IPO Prospectus’ provided below.
Stock
Exchange Cpn Rate
Ann Amt LiqPref
CallPrice Call Date
Matur Date Moodys/S&P
Dated Distribution Dates 15%
Tax Rate
NYSE
Chart
5.75%
$1.44 $25.00
$0.00 n.a.
7/25/2052 Baa2 BBB+
10/02/2019 3/15, 6/15, 9/15 & 12/15
Click for MW ExDiv Date
Click for Yahoo ExDiv Date
No
Wishing you profitable investing, Nomad
Hi Nomad, thank you for your reply. I should have been more clear on my question. I wrote it under Wedgehead’s post on DTP. My question is on the conversion. I see these offerings and wonder when the time comes do you have exposure to significant principal loss? Setting the company aside I’m trying to figure out how one evaluates a good one from a risky one.
Best regards,