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

[Winemaker]

For what it's worth, Amtrust has an offer to go private by an Stone Point Capital, the CEO, and the Karfunkel Family, who already own 43% of the common. Was all this FBI talk a way to knock the shares down to facilitate this buyout. Will the preferreds rally? Or are they about to get taken to the cleaners?

 

[Mulligan]

For what it's worth, Amtrust has an offer to go private by an Stone Point Capital, the CEO, and the Karfunkel Family, who already own 43% of the common. Was all this FBI talk a way to knock the shares down to facilitate this buyout. Will the preferreds rally? Or are they about to get taken to the cleaners?

Maybe both...Get it cheap and the preferreds will rally as a confidence sign. Of course recent rate movements is a negative short term, but longer term its good for the health of the insurance company.

 

[Mulligan]

Well that was quick....KTBA I hardly knew you. Back to the bull pen you go. Flipped out at $28.90. Easy tax free money. Since it is going to rain all day tomorrow I will get to buy something else with the cash. Noticed my 300 share bid of KIM hit at $17 today sometime while I was playing on the sloppy just unfrozen golf course. I finally actually own a tiny bit of a common stock!

 

[Mulligan]

Winemaker, I was just thinking about AFSI.. And this may not pertain to their preferreds...But their has been some past history of companys going private and bastardizing the preferreds.. Some nasty things have happened to some...It has a name... Waldenized....

Unrelated thought on my GJO (synthetic adjustable with the Walmart bonds in trust)....Boy Walmart wants them 7.55% bonds bad. They just issued a tender to anyone willing to redeem them at about $145.... 45% plus over par for the 2030 maturities. I guess they shouldnt have issued this bond uncallable way back in the day.

 

[Winemaker]

Waldenized? I called it "taken to the cleaners".

I've been busy around house last couple of days, due to nice weather. I'll get to post office tomorrow or Sat.

 

[Texas Proud]

Well, my PIY just got back to what I paid for it... for awhile I was down a good amount... still going to hang on as I do have it in my 'hold' category....

 

[Mulligan]

Well, my PIY just got back to what I paid for it... for awhile I was down a good amount... still going to hang on as I do have it in my 'hold' category....

Texas you are more emotionally inclined to handle these types. I would be on life support in ER, and Coolius would already be in the crematorium.

 

[Coolius]

Texas you are more emotionally inclined to handle these types. I would be on life support in ER, and Coolius would already be in the crematorium.

 

[Texas Proud]

Texas you are more emotionally inclined to handle these types. I would be on life support in ER, and Coolius would already be in the crematorium.

LOL... probably am... I remember when I was young and working at a bank... I used to calculate the loan loss reserve for the bank... one time I was asking an EVP about the level... he said 'If I do not make any bad loans I am not making enough good loans either'.... IOW, if he only made 'safe' loans the net income would be so low that the bank would not make money... but it is prudent loans you make and live with the few who stink...

I have made some really bad calls before and lived with the loss... even the ones that I am investing in have a less chance of a big loss than some... if you look at a table of defaults for each rating grade, they are not horribly worse in the BB range than the investment grade... sure, I have a few that are worse than BB, but my overall avg is BB-...

I might get out of PIY, but the common is making a recovery and it might be turning around... I will look at cash flow and decide later..

 

[Texas Proud]

Just a heads up from me...

I have been looking for more variable since I do think that interest rates are going up and would like to have my int/div move up with it... Soooo... found this while rummaging around...

C-N, or C.PRN.... Citigroup Capital VIII is paying 3 month libor +6.37%...

Ex divi on the 26th with .50 divi, selling at $27.60 ish... 7.25% yield...

​

 

[bobandsherry]

Just a heads up from me...

I have been looking for more variable since I do think that interest rates are going up and would like to have my int/div move up with it... Soooo... found this while rummaging around...

C-N, or C.PRN.... Citigroup Capital VIII is paying 3 month libor +6.37%...

Ex divi on the 26th with .50 divi, selling at $27.60 ish... 7.25% yield...

Already past call date and trading at $2.60+ premium. C just recently called their "P" shares, holders there took at bath on the call, dropped from nearly $28 to now just the $25.48 (call price and 2/15 div).

I feel better with ALLY-A (variable as well, 3mo LIBOR + 5.785%). Less premium and roughly same yield.

 

[Mulligan]

Just a heads up from me...

I have been looking for more variable since I do think that interest rates are going up and would like to have my int/div move up with it... Soooo... found this while rummaging around...

C-N, or C.PRN.... Citigroup Capital VIII is paying 3 month libor +6.37%...

Ex divi on the 26th with .50 divi, selling at $27.60 ish... 7.25% yield...

​

I have owned that before Texas. The call risk is just too much for me. I sold when it climbed above $26.50.
Now, here is something I really think you may be interested in. In fact I bought 500 today. I am going to attach a link so I dont have to rewrite it. It includes some valuable links. If it dont work let me know...Its the old PFX which shows on Quantum. Bought at $18.85 which is a 9.86% yield and about 11% (eyeball) YTM in 2032. You got the nerve to actually maybe be interested in this delisted issue.

http://www.siliconinvestor.com/readmsg.aspx?msgid=31432618

 

[Texas Proud]

Already past call date and trading at $2.60+ premium. C just recently called their "P" shares, holders there took at bath on the call, dropped from nearly $28 to now just the $25.48 (call price and 2/15 div).

I feel better with ALLY-A (variable as well, 3mo LIBOR + 5.785%). Less premium and roughly same yield.

Thanks for the heads up... I did not see they called something else... will look at this and what Mulligan has listed...

But, will hold for the divi at minimum

 

[Texas Proud]

I have owned that before Texas. The call risk is just too much for me. I sold when it climbed above $26.50.
Now, here is something I really think you may be interested in. In fact I bought 500 today. I am going to attach a link so I dont have to rewrite it. It includes some valuable links. If it dont work let me know...Its the old PFX which shows on Quantum. Bought at $18.85 which is a 9.86% yield and about 11% (eyeball) YTM in 2032. You got the nerve to actually maybe be interested in this delisted issue.

Income Investing Message Board - Msg: 31432618

Vanguard does not come up with anything using the new symbol or the cusip... it is really small, so might not trade...

What account did you buy and what symbol did you use?

 

[Mulligan]

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

Vanguard does not come up with anything using the new symbol or the cusip... it is really small, so might not trade...

What account did you buy and what symbol did you use?

Texas, I actually used Vanguard. You have to call the bond desk and give them the cusip number that is on the FINRA link I posted above. See it was delisted when Nassau bought them out. Keeping a tradeable security on the exchange requires reporting costs. Since Nassau doesnt issue parent reports as it is private it just delisted it. When a baby bond delists it becomes part of the bond family by default and then it trades by cusip. There are actually several of them out there. This issue actually usually trades several times a day and has a market maker.
BTW. You may get a better price. It took them an hour to do this as their regular market maker for this issue was not answering the phone so they went to option 2 and tracked him down. I will be gone next week so I didnt want to wait and see.

 

[Mulligan]

Texas, I got an interesting anecdotal comment from another forum member after I posted the trade. Seems his son sells the Phoenix insurance products. He said they have tightened up the underwriting process considerably since Nassau took it over. I suspect Nassau is some big money boys who play big ball, and dont like losing their personal money after injecting capital. So I take that as a very positive sign and maybe is partly the cause of the beginnings of the bond rating upgrade. You have to fly blind just a bit here since it is a private company.

 

[brokrken]

You guys are getting a bit nutty with these type of issues. I love it!

 

[Mulligan]

You guys are getting a bit nutty with these type of issues. I love it!

Yes, Ken, this is a deep in the weeds one. But actually more liquid than many I own. It traded over 5000 shares today. I hope it works it as it has the past 16 years as 10% annual isnt a bad deal.

 

[Mulligan]

Already past call date and trading at $2.60+ premium. C just recently called their "P" shares, holders there took at bath on the call, dropped from nearly $28 to now just the $25.48 (call price and 2/15 div).

I feel better with ALLY-A (variable as well, 3mo LIBOR + 5.785%). Less premium and roughly same yield.

Bob, I am in ALLY-A, also... Im gonna be brave and hold and dare them to call. We basically get half the spread above par next month, to mitigate the call loss.

 

[bobandsherry]

Bob, I am in ALLY-A, also... Im gonna be brave and hold and dare them to call. We basically get half the spread above par next month, to mitigate the call loss.

I've been re-investing the div's so my basis is now about 45 cents over par. So being brave as well, pocketing another 46 cents in a month, puts me about even with past dividends as my reward on a worst case basis.

 

[Texas Proud]

I have owned that before Texas. The call risk is just too much for me. I sold when it climbed above $26.50.
Now, here is something I really think you may be interested in. In fact I bought 500 today. I am going to attach a link so I dont have to rewrite it. It includes some valuable links. If it dont work let me know...Its the old PFX which shows on Quantum. Bought at $18.85 which is a 9.86% yield and about 11% (eyeball) YTM in 2032. You got the nerve to actually maybe be interested in this delisted issue.

Income Investing Message Board - Msg: 31432618

OK... looked at it and it is too much risk of call... if the price was cheaper (for C-N) I might hang on.... so, after the divi I will sell...

Looks like this one would be a long term hold... it looks like it has been as low as $17.20 to $19.00+... will have to think about it, but the yield looks good and it is under par...

 

[Mulligan]

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

OK... looked at it and it is too much risk of call... if the price was cheaper (for C-N) I might hang on.... so, after the divi I will sell...

Looks like this one would be a long term hold... it looks like it has been as low as $17.20 to $19.00+... will have to think about it, but the yield looks good and it is under par...

Texas, yes this is a buy and hold, mostly because you get beat up on bond dealer spread...Just in last week it shows trades between $17.27 to $19.38... Bought these include inter bond trades and the rip off sell prices. But you can see the chart in FINRA and it stays in that range. At 10% per annum, I can hold long term and apparently the company is getting healthier. Nice to see they have S&P rate this to track quality. The bond is old, but not tiny. A $300 million issuance. If you wind up being interested and call Vanguard Tuesday, you may get a better spread buy dealing with their regular market maker...I got the second stringer as the regular one was answering the desk call.

 

[Mulligan]

Texas, here is an old article pre acquisition that explains the whole situation a little better. Read all the comments too. You will notice the price of PFX is higher now than the low $16 pre merger. Despite being delisted, it trades higher which is a reflection of the stronger credit quality since Golden Gate Capital funded the acquisition.

https://seekingalpha.com/article/3838106-phoenix-companies-13_2-percent-debt-yield

 

[brokrken]

I know it's not a preferred, but it's dividend related, so I'll throw it out to you guys. About 5 years ago I bought Colonial Properties common, which was bought out and became MAA (Mid-America Apartment). I am now sitting on a roughly 50% capital gain, current yield is about 4%, while yield on original investment is about 6.2%. In any case, I'm thinking I should pocket the gain and buy back into something with a better current yield and similar risk profile. Thoughts? Ideas?


One thought is that I'm actually carrying a capital loss in NLY, so I could average down there.

 

[Mulligan]

I know it's not a preferred, but it's dividend related, so I'll throw it out to you guys. About 5 years ago I bought Colonial Properties common, which was bought out and became MAA (Mid-America Apartment). I am now sitting on a roughly 50% capital gain, current yield is about 4%, while yield on original investment is about 6.2%. In any case, I'm thinking I should pocket the gain and buy back into something with a better current yield and similar risk profile. Thoughts? Ideas?


One thought is that I'm actually carrying a capital loss in NLY, so I could average down there.

Sorry Ken, I am no help for you here.