Lodging REIT Summit Hotel Properties (INN) has priced their previously announced preferred stock issue.
The issue prices at 5.875% for 4 million shares with another 600,000 available for over allotments.
The issue is cumulative, non qualified and unrated.
The issue will trade immediately under OTC grey market ticker SMTHV–look for this ticker to change in the next day or two.
The pricing term sheet can be found here.
19 thoughts on “Summit Hotel Properties Prices New Preferred Issue”
Ticker updating to SMTHP, per E*TRADE rep just now. I discovered this when an order for SMTHV placed late in the day was rejected after-hours.
I sure hope I don’t get my head handed to me but thought I would give you guys a little “Heads Up” on Summit Hotels. I just spoke “again” to the I R Mgr as I wanted to get some better insight to whats going on with the Delta Variant. He told me their business has really picked up extremely well over the last few months. He went onto say that right now their “weekends are between 85 & 90% occupancy” and during the week days they are running 65% occupancy. He went onto say as I knew that during the pandemic they never missed even one payment on their 2 preferreds which are the D & E. So I will stick with my prediction which I normally don’t do of saying I think this new F will easily over time trade up to over $25.50. I certainly could be wrong but this is a really good company. I’ve been in their preferreds along with my CPA for many years all the way back to their B & C preferreds that have long been called. Hope this helps.
picked up 200 at Vanguard at $24.86 , thanks Tim !
1st div’s payment date is Nov 30 (not Nov 20).
“On or about the last day of each February, May, August and November, commencing on November 30, 2021. The first dividend payment will be paid on November 30, 2021 (long first dividend period).”
Early morning typo. Will fix.
I reserve the right to be wrong but for you flippers this should be some easy money. Just take a look at their 6.25% E for proof.
E’s yield is at 5.8% so i would think the new issue would stay relatively flat unless interest rates continue to drop.
If INN-E is called at the earliest date 11/13/2022, then that leaves 6 dividends of .3906 = 2.34 BUT, the price of the E issue now is 26.85.
Subtract the 2.34 from 26.85 and you get 24.51.
That means you get .49 cents to hold for 18 months.
The new issue Smthv will give you 1.83 for the next 18 months plus you get it below par by .12 ……. so new issue $1.95 or E issue 49 cents
I think the new issue is a better play.
Am I wrong with my math?
Keep in mind as of today most folks out there in America or not even aware of this new issue. Wait till the crowd finds out about it and it will get a nice jump up. Thats why I said on my earlier post for the flippers among us this is an easy layup to the hoop. In 2 or 3 weeks I could easily see this new 5.875% issue trading easily over $25.50. People forget that everybody and their 2nd and 3rd cousin are “chasing yield”.
Did you buy this issue Chuck?
Hello Kapil; Have you ever had one of those days where you take 2 steps forward and then 3 steps backwards??? Thats my day today as I type this. YES, I did buy 1,950 shares this morning at $24.90 but I own a boatload of both the D & E. Selling out of all of my D. Got $25.33 and $25.35. Schwab does a nice job of rounding up “sometimes” for me. I do have concerns like many others about this covid and the new strain. So rather than jumping in the Pool Head First and breaking my neck I will keep some cash handy and look for other ideas. I don’t mind telling you that I did own 3,500 shares of PBA but as of this morning I now own 6,000 shares of PBA as the street was not impressed with the quarterly results from yesterday and it was down around $31.80. I feel that between my CPA who also owns a large position in PBA and myself who has read everything I can get my hands own we are comfortable owning this Pipeline Company. Back to Summit for a minute. They own 73 Hotels spread around in like 23 states. But of course that doesn’t mean much if this covid can’t be brought under control. No doubt about it there is risk with this company.
I bot some as well mainly because of the strength of the E shares. Hotels are a bit scary given the delta and the lambda variants but I am comfortable for now.
Are you flipping it, Chuck?
James; Good morning to you. NO, Iam not a flipper. I actually bought another 2,500 in another account on friday afternoon and now have a total of 4,450 shares. All bought around the $24.90 to $24.94 area. Iam very comfortable holding these shares till they get called in August of 2026. I did however sell all of my INN+D between $25.33 and $25.35. I also still own a very large position in INN+E which cannot be called until 11/13/2022. Also on friday bought another 2,500 of PBA for a total of 6,000 shares. Will now stop as thats enough of that particular issue. Great Company but can’t go crazy over it.
“If” it is called. For me personally, i do not invest in hotel stocks. I know 6 people that have had their covid shots, and they now have covid. Not sure what is going on there… 2 of them are in the hospital right now. My neighbor told me last night they knew of a party of 20 people that got together in the twin cities and they all had their shots. 4 of them now have covid. Again… not sure what is happening. Defective covid shots? A new strain? I wonder for Quality Assurance if the nth shot was pulled out of a case that arrived at a hospital and checked? What if the temperature or the specifications went out of line for X hours while it was transported, sitting on a dock, sitting in a truck…
Anyways i don’t own any hotel stocks, nor plan to. The better play for me is to stay out. For me, I don’t need to jump in and buy any new stock because it is over 5%.
Not defective COVID shots; it is clear that the mRNA vaccines are not as protective against the latest virus mutation (Delta variant). It is what dominant viruses do – they have mutated in an attempt to survive since the dawn of time. The vaccine protection may also be waning as we approach the 6+ month mark for many vaccinated individuals. Many citizens act like the vaccines make them immortal – they clearly do not.
My local paper is FINALLY starting to release statistics on fully vaccinated residents:
“Breakthrough infections in vaccinated people now account for 16 percent of new COVID-19 cases in Clark County, Cassius Lockett, the Southern Nevada Health District’s director of disease surveillance and control, told the Review-Journal on Thursday.
Since June 1, breakthrough cases have accounted for 11 percent of COVID-related hospitalizations, he said. It is unclear how many of the hospitalizations were in COVID-positive patients with other conditions, such as heart attack or stroke. Deaths in fully vaccinated people accounted for 13 percent of COVID-related fatalities.”
I agree that as between these two, the new issue is the better value.
But if you’re OK with a hotel preferred, why not RLJ-A, which I see to be of comparable quality to the INN issues, but with a 6.86% yield, and, for practical purposes, in effect not callable?
My intention from the start was to Flip this issue and squeak out 1% or more over the next 2-3 weeks.
I’ll look into RLJ-A .