Preferred Stock Investing-The Good , The Bad and The In Between 2015 - 2020

[bobandsherry]

Ken - got it. For me, the raising rate environment the low fixed rate issue, coupled with long term maturity leaves me feeling too vulnerable to price dropping as rates go up. If the maturity was shorter then I'd feel better. But you got an upgrade in yield and quality while still staying within your disciplined approach so that's good.

 

[Texas Proud]

You guys still holding your BGCA? And do you think they'll use what's left of this new 5.375% note they issued to redeem it? There is plenty of money there. After they pay off the 8.375% notes that are out there, they'll still have $210mln left.

Got me looking, so thanks...


I cannot find anything on the original private placement of what they plan to do with the money... they did issue another bond that was an exchange for the private placement so those will be able to trade in the future...


There is a part of me saying they will not do anything since the new issue matures in 2023... but who knows what will come down...


I am going to hold on... cannot make much money selling now and if it does continue I will be happy with the divi and the rating..


BUT, with my luck it will be called as I have had a good number called....

 

[Mulligan]

Also, don't roast me, but I did pick up some TBB today at a decent discount. Fairly safe and pays way better than the cash account that money was sitting in. Also, helps balance my risk a bit, as most of my other preferred/debt are riskier. Also, can't find anything else that looks very intriguing these days.

Ken, did you ever consider KTBA over TBB? The yield was quite a bit higher and safety same level. Both maturities are way past my life expectancy.

 

[Mulligan]

Got me looking, so thanks...


I cannot find anything on the original private placement of what they plan to do with the money... they did issue another bond that was an exchange for the private placement so those will be able to trade in the future...


There is a part of me saying they will not do anything since the new issue matures in 2023... but who knows what will come down...


I am going to hold on... cannot make much money selling now and if it does continue I will be happy with the divi and the rating..


BUT, with my luck it will be called as I have had a good number called....

Texas one of the SEC filings explicitly mentioned the “8.125% debt issue” as possibly being redeemed with the excess funds from issue. So the possibility was officially mentioned...But not mandated.

 

[Mulligan]

Like Bob, I bailed on part of my DCP-B. Keeping half but looking to invest the 10k proceeds into a new issue and leave the rest for longer term hold.
ASRVP my favorite flipping vehicle had a wild ride yesterday. I bought 400 more at 27.75 on 75 cent drop, then it proceeded within an hour of trading over $30, before settling back around where it started at $28.55.
Did my Dad a favor today. He was wanting to clean out his accounts as he wants all money under active management being he is too old to stay on top of things. So he wanted to sell his 600 shares of AILLL. So I told him I would set a 600 share floor at 26.65 for him. He got 275 sold off at 26.80 and the remaining 375 waterfalled to me at 26.65. I just added them to my oversized bloated position.

 

[Texas Proud]

Texas one of the SEC filings explicitly mentioned the “8.125% debt issue” as possibly being redeemed with the excess funds from issue. So the possibility was officially mentioned...But not mandated.

OK... I was looking for that but never found it... what date was the filing?



IF they mention it then it is very likely to happen... remember I was a corp trustee for a few years... they cannot say for sure just in case something else happens that prevents them from doing it...



So I will have to look for an exit...


Edit to add...... taking a look at the chart you can see that the 'event' happened on the 18th as the price went from 25.90 to 25.50 in one day... OH WELL.... another one bites the dust!!!

 

[Mulligan]

OK... I was looking for that but never found it... what date was the filing?



IF they mention it then it is very likely to happen... remember I was a corp trustee for a few years... they cannot say for sure just in case something else happens that prevents them from doing it...



So I will have to look for an exit...

The Company intends to use the net proceeds from the sale of the 5.375% Notes to repay in full the short-term borrowings. Additional net proceeds will be used for general corporate purposes, which may include redemptions of the Company’s 8.125% Senior Notes due 2042.
https://www.sec.gov/Archives/edgar/data/1094831/000119312518221896/d567924d8k.htm

The yield is so high it will have to happen at some point. Entergy Ark said 3 months ago they may redeem their preferreds with the bond offering proceeds but still havent. I got my hit and run profits and am gone. I would like to catch a situation where they sneak a call notice in and maybe I could swoop in for some money again, but wont unless a definitive call notice comes.

 

[Texas Proud]

The Company intends to use the net proceeds from the sale of the 5.375% Notes to repay in full the short-term borrowings. Additional net proceeds will be used for general corporate purposes, which may include redemptions of the Company’s 8.125% Senior Notes due 2042.
https://www.sec.gov/Archives/edgar/data/1094831/000119312518221896/d567924d8k.htm

The yield is so high it will have to happen at some point. Entergy Ark said 3 months ago they may redeem their preferreds with the bond offering proceeds but still havent. I got my hit and run profits and am gone. I would like to catch a situation where they sneak a call notice in and maybe I could swoop in for some money again, but wont unless a definitive call notice comes.

Thanks... I actually saw that but did NOT look at the press release.. and the 19th is the day the shares dropped...


Going to exit and hope I can get a few pennies above call price.... but if I do not then no big deal...


Why didn't any of you warn us before the 18th

 

[Mulligan]

Thanks... I actually saw that but did NOT look at the press release.. and the 19th is the day the shares dropped...


Going to exit and hope I can get a few pennies above call price.... but if I do not then no big deal...


Why didn't any of you warn us before the 18th

Texas, I am taking a small bite out of this apple first chance I get.
https://innovativeincomeinvestor.com/global-partners-prices-new-f-to-f-preferred-units/

 

[Texas Proud]

Texas, I am taking a small bite out of this apple first chance I get.
https://innovativeincomeinvestor.com/global-partners-prices-new-f-to-f-preferred-units/

Wow... thanks for the heads up... can you get it at offering or are you going to wait and see what happens?


I do like it in that it cannot be called anytime soon...

 

[Texas Proud]

Thanks... I actually saw that but did NOT look at the press release.. and the 19th is the day the shares dropped...


Going to exit and hope I can get a few pennies above call price.... but if I do not then no big deal...


Why didn't any of you warn us before the 18th

I guess I got out too soon ... Got out higher than the accrued interest at 25.54 but it has gone up to 25.62... oh well...

 

[Mulligan]

Preferred Stock Investing-The Good , The Bad and The In Between

I guess I got out too soon ... Got out higher than the accrued interest at 25.54 but it has gone up to 25.62... oh well...

Its probably bouncing around on gambling that it doesnt get called. The odds arent in their favor though I would guess. I got in on GLPRU (temporary ticker) at 24.80 for 400 shares. Went and bought 300 more in another account at 24.80 also. Remember this in an LP so its a K-1 issue....I flipped out all of my remaining DCP-B at 25.88 so that was an easy money flip! Made almost 80 cents on that lot holding only a few weeks.

 

[MooreBonds]

Its probably bouncing around on gambling that it doesnt get called. The odds arent in their favor though I would guess. I got in on GLPRU (temporary ticker) at 24.80 for 400 shares. Went and bought 300 more in another account at 24.80 also. Remember this in an LP so its a K-1 issue....I flipped out all of my remaining DCP-B at 25.88 so that was an easy money flip! Made almost 80 cents on that lot holding only a few weeks.

Picked up 150 at 24.90 in a tax-advantage account (which doesn't have other k-1s, so shouldn't be an issue).

 

[bobandsherry]

I guess I got out too soon ... Got out higher than the accrued interest at 25.54 but it has gone up to 25.62... oh well...

I got out at $25.62 but see it's squeezed up another penny now Perhaps it has a life but not worth the risk of call. Now to search for where to put the $$. Maybe GLPRU..... (thanks Mulli for sharing the info).

 

[NgineER]

Flipped part of DCP-B making a good chunk of change - thanks Mulligan
Bought 600 shares of GLPRU at 24.90 - thanks again Mulligan

 

[brokrken]

Ken, did you ever consider KTBA over TBB? The yield was quite a bit higher and safety same level. Both maturities are way past my life expectancy.

Nope, forgot about that one.

 

[Mulligan]

Preferred Stock Investing-The Good , The Bad and The In Between

Flipped part of DCP-B making a good chunk of change - thanks Mulligan
Bought 600 shares of GLPRU at 24.90 - thanks again Mulligan

Ngine, I wish I could tell you.....I wish you success from my detailed intensive brow sweating balance sheet dissection... Unfortunately its this...Im the lead buffalo running us all over the cliff! [emoji4]
Kind of an all purpose LP with fingers in pot everywhere to gas stations and has been around a long time. Loves to shovel out the cash to common unitholders though and bonds arent rated real high. But that being said high yielders seem to keep getting buying attention. And its already crawling north and hasnt even been put to real ticker trading. Piece of crap Chicken Soup sent a 9.75 preferred out recently and it was already at 25.40. My bet is this one will get there and more before next divi. We shall see I guess.
I cant keep track of all my recent small ball flips as it has been pretty easy. Flipped 100 of WELPM at $119.99 after buying at $113 today and collected a div holding maybe 2 months tops. Just stuff like that though not as good as that.
Had 600 shares of ASRVP bought below $28,sold 200 yesterday at 28.71 and bought 300 more today back at 27.90. I really cant recommend playing in this one being so far over par, but the way above par past call issues that are illiquid is where the goofy price bouncing is at so its one of my entertainment issues that has made me good money over the years. When the party ends, I dunno, maybe soon, lol. But I dont mind holding this one long term if it stays outstanding as it has a very comfortable 2028 maturity since it was issued in 1998.

 

[Texas Proud]

OK... price went up as I expected...


But, got my GLPRU at 25.03... did not have time to get in yesterday...


In the long run it is only pennies and I plan to hold this until they call...

 

[Mulligan]

OK... price went up as I expected...


But, got my GLPRU at 25.03... did not have time to get in yesterday...


In the long run it is only pennies and I plan to hold this until they call...

You know Texas, I really gave no thought to holding long term, just an obvious lazy researched shooting fish in a barrel trade. But the more I look at this one the more I am tempted to hold long term such as you are doing.

 

[Texas Proud]

You know Texas, I really gave no thought to holding long term, just an obvious lazy researched shooting fish in a barrel trade. But the more I look at this one the more I am tempted to hold long term such as you are doing.

I think the company will be able to make enough cash to cover this issue for as long as they want... it should be highly rated... do not know why it has such a high coupon except that it has to pay out all income to common... so not able to build up a big cushion of cash like a C corp...


Plus, it is not going to be called anytime soon... plus it does become variable in the future so if rates go up it will also (well, maybe down too)...


I have had too many of my pref that I wanted to hold long term called... so I like the safety of that with the high coupon...


My long term holdings now include SPLP-A, GLPRU, NSS, C-N, PFH and CPE-A...

 

[Mulligan]

Preferred Stock Investing-The Good , The Bad and The In Between

Their bonds are only B rated, so that would be part of the high yield I suspect. But they make money and been around forever, so I feel comfortable too.

 

[Texas Proud]

Their bonds are only B rated, so that would be part of the high yield I suspect. But they make money and been around forever, so I feel comfortable too.

OK, bad wording on my part... I think it should be rated in the BB range, so non-investment grade speculative... no way is it investment grade...


I do have it listed as a B on my weighted avg table.

 

[Mulligan]

Well after some successful high yield trades and purchases it was time to dial back some extra cash and impound it on the other end. Bought 380 shares of GGO-A today at $42.05. Its a $40 par $2 yearly divi. In a bit over a year it will trade at 10 year treasury plus 200 basis points with 5% par floor and 7% ceiling. A very safe and conservative issue. It originally was issued to people who paid the ransom note of buying the common shares first and these then leaked out later. It can be “putted” at par in 2019 and 2021 window. May be of some interest to watch for at the right price.
Used cash and proceeds from selling 1200 shares of CTGSP at 6.14 today. Who says you cant make money trading low yeilders. I made 8% holding this for less than 3 months.

 

[Mulligan]

Update time... NS management said in conference call this week they “have some debt to refinance later this year”. Except there is a problem. There is no debt to refi or rollover until 2020. So they have to be referring to NSS. So I sold it all at 25.69 previous two days and will just assume its a goner.
GLPRU has been a shoot fish in a barrel trade. Anyone beside Texas get in?
Been buying up old trust debt, and added up to now 1000shares of AGO-B at 25.88 which goes exD this month. Did research and Puerto Rico is not a disaster in waiting. They have 2.8 billion in excess capital that designates AAA rating. Despite PR overhang S&P still rates their profile AA. In fact Moodys projected the PR loss and still said they would remain within their AA profile. All 3 credit rating agencies are in alignment with each other. Plus, AGO shows no desire to ever call anything. They presently have a 7% bond 2034 maturity that has been callable for quite a while and havent touched it and it trades 14% above par. So I like holding this 6.64% debt issue for now.
I now own...GLPRU, AGO-B, BANFP, ASRVP, AILLL, FIISO, MTB-, PFX, GGO-A, RILYL, RILYH, DS-B, PIHPP, HE-U, MSEXP, BRG-A, CNIGP

 

[bobandsherry]

I snuck in a few shares of GLPRU. Got caught up in some other things and missed the real early pricing but should still do OK on the div yield. I've been jumping out of some of the preferreds and into common as I'm watching the potential raising rate environment. Betting on that happening and catching a few $$ on common rising as a result. Done OK

Thanks for info on NSS. You may be right on your read from their call, but seems based on other recent issues they may not get any better pricing than they currently have. This was one of those holdings that I jumped out, reduced my holdings back in June so will hold for now, going to see another div payment but keep on eye on what happens.

My remaining preferred holdings: RLGT-A, CDMOP, RIYLZ, GLPRU, AILLL and NSS