Will Let Go of Vornado Preferred Tomorrow

Some of these preferred prices are almost too good to be true.

Tomorrow if the current price is available I will sell the Vornado 5.70% preferred (VNO-K) issue that I wrote about last week here.

I paid $25.26 for the issue last week and it closed today at $25.61. It is currently callable and is split (S&P has them a notch under investment grade while Moodys has them low investment grade) investment grade.

The next quarterly dividend is to be paid 1/1/2020 and is about 36 cents–so it makes no sense to hold at this point. I bought only 365 shares, but I will take my profit and wait for another entry.

Other investment grade issues that folks here are playing with are the State Street 6% STT-E issue, the Capital One Financial 6.70% COF-D issue and the Northern Trust 5.85% issue (NTRSP). Each of these is redeemable only on a dividend payment date–so once a pay date is past one can buy with some confidence they will have it for the full next quarter. At this moment each them is a bit expensive–meaning each is more than 1 dividend payment date above $25.

12 thoughts on “Will Let Go of Vornado Preferred Tomorrow”

  1. Hello, Tim what about COF-D? Are they called it on the ex-date as you said with the prospectus ?

    1. COF-D is called for 12/2 with payout to be $25 even… Holders of record on 11/15 will receive the normal .41875 quarterly on 12/1.

    1. I use STT-E and others like it as my sweeps account. Nothing happening today and the price dropped a couple points so I bought it, filled at 25.315. I’ll sell when I find something to buy or after it pops a few points. Better than 1.5% sweeps.

      1. MartinG – Allow me to suggest an alternative interpretation of your purchase. At 25.315, which by the way was a drop of a couple of pennies, not points, your purchase is exactly the same as staying in a 1.50% sweep without the convenience because at 25.315 the YTC at stripped price is exactly the same 1.50%. So your purchase only affords a possibility of it being better than a sweep vehicle, but not only if it remains outstanding…. I’m not saying it’s a bad idea, it’s not, and I too am interested in STT-E, but understand that with the call feature, you’ve traded your sweep convenience for the same yield for the next 2 months and a prayer of a better return should STT-E survive its next call.. Having said that, that prayer translates into a 4.23% yield to STT-E”s next call date of 3/15/2020 should it survive 12/15/19 and then get called, so there’s certainly an incentive to buy! To me it’s a great game, but I’ve been attempting to buy a few pennies lower.

    1. SteveA–was going to mention that as I am a holder–investors really like Gladstone Commercial for some reason–I don’t really get it, but I am happy with the price movement.

  2. I am one of those playing NTRSP. Cost basis is $25.29 ( bought at various prices up to $25.34 ), with the Jan 1 divy assured, I have no call risk. Just hoping that Northern Trust will not call, but always expecting the worst.

    Also hold a few hundred shares of STT-E, cost basis $25.36, so no call risk, but no gain either. However, these were bought some time ago, so I have received a few dividends since purchase.

  3. Sell those last three 30-some days before pay date, possibly buy back 29 days before pay date. Since a call requires 30 days notice and this tactic isn’t normally factored into the price. Not foolproof because calls can be announced more than 30 days in advance.

Leave a Reply

Your email address will not be published. Required fields are marked *