Preferred Stock Investing-The Good , The Bad and The In Between 2021

Mulligan said:
PB, Here is one to think about...I bought 12 shares at it is a $1000 par issue..

For those that may be interested, Edison International parent of Southern Cal Edison issue a $1000 “par” preferred that went live today. A pedestrian 5.375% fixed, for first 5 years. After that resets to 5 year treasury bond yield plus 4.698%. Resets in March 2026 and every 5 years thereafter. There is no utility preferred with that high of a reset adjustment out there which is the long term appeal. Reset preferreds are just entering US market. Ute NI-B issued one a couple years ago that resets in March 2024 with a 3.63% plus 5 year and presently trades at $27.27.
I personally bought 12 today off the bond desk using the cuspid as this will not trade on the exchanges or OTC.

https://www.sec.gov/Archives/edgar/data/827052/000119312521067286/d312913d424b5.htm
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Interesting... any idea how the dividends will be treated , as in 15% like a regular dividend or not ?

I looked for but didn't find the cuspid ?
 
Sunset said:
Interesting... any idea how the dividends will be treated , as in 15% like a regular dividend or not ?

I looked for but didn't find the cuspid ?
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Since I have the info, it would be useful if I shared it huh? Sorry I forgot to post...Cuspid is 281020AS6
You may have to assist and tell them its an Edison International $1000 preferred stock.
 
pb4uski said:
That sounds interesting, but I already have a slug of SCE-L (aka SCE.PRL) that has a 5% coupon and I'm in it at $23.10 for a 5.4% yield.... would the above issue be duplicative from a diversification perspective? As I read it it was issued by the parent rather than the operating subsidiary, right?

It looks like the sub is a slightly better credit all else being equal? SCE-L is BB+ and SCE's senior debt is BBB, a notch higher than the parent's senior debt so I'm guessing that the parent's preferred would be BB.... make sense?

That 4.698% reset does seem attractive... the 5-year treasury would only need to be 0.302 to get the same "coupon" as SCE-L... anything above that would be gravy. What was the pricing like?
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It was rated BB+ from what I was told. Edison is the holding company that owns SCE. So it would be structurally subordinate to SCE. Typically its fighting over pennies as it would all go down together. Look at Pacific Gas and Electric and its holding company. They both went under together and escaped bankruptcy together.
Its qualified QDI income.

Distributions on the Series A Preferred Stock constituting dividend income received by a U.S. holder that is an individual generally will be subject to taxation at preferential rates as qualified dividend income, provided applicable holding period requirements are met and certain other conditions are satisfied. Distributions on the Series A Preferred Stock constituting dividend income paid to U.S. holders that are U.S. corporations generally will qualify for the dividends-received deduction, provided applicable holding period requirements are met and certain other conditions are satisfied and subject to various limitations.

I only bought 12k, but I would have bought 50k if it was from my local utility Ameren MO or holding company Ameren holding company. Maybe local bias...or anti CA bias, lol.
 
3 days in a row I've had sell orders in on SPLP-A and each day I see trades at my limit but for whatever reason mine aren't getting executed. I didn't check the "all or None" box so I'm not sure how the algorithm works to decide which shares to take at that price. Any ideas?
 
brokrken said:
3 days in a row I've had sell orders in on SPLP-A and each day I see trades at my limit but for whatever reason mine aren't getting executed. I didn't check the "all or None" box so I'm not sure how the algorithm works to decide which shares to take at that price. Any ideas?
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I have seen when I have an order in for something that it will actually be trading for 1/2 a cent off from what it's showing in some places.

Could it be there are just too few buyers at that price, perhaps set your price for GTC or day+ext.
 
Kinder Morgan acquired El Paso and EPB no longer trades.
So what is the plan with EP-C?
What obligation does KMI have?
I don't see anything on this.
 
DR1959 said:
Kinder Morgan acquired El Paso and EPB no longer trades.
So what is the plan with EP-C?
What obligation does KMI have?
I don't see anything on this.
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Kinder Morgan pays the preferred dividend and will do so until it's called (10 years or so?). Mulligan has the info on this in a thread here a while back if you search.
 
aja8888 said:
I picked up some more EP+C today under $50. :)
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Rising rates seem to be squeezing the value of these sub 5% issues. Interesting that it's dropping under par just prior to Ex-D, roughly 60 cent dividend. So I picked up a few more shares @$49.80.

I haven't see the dividend declared but Ex-D should be in next couple of days:confused: ETrade still showing as "estimated" for payment on 3/31.
 
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aja8888 said:
Kinder Morgan pays the preferred dividend and will do so until it's called (10 years or so?). Mulligan has the info on this in a thread here a while back if you search.
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It's past call (2002), maturity date is now "only" 7 years out (2028). So worst case (short of BK - and I don't have that concern with KMI) is 4.75% return for 7 year hold. 7 year CD's only paying around 0.75% :)
 
brokrken said:
3 days in a row I've had sell orders in on SPLP-A and each day I see trades at my limit but for whatever reason mine aren't getting executed. I didn't check the "all or None" box so I'm not sure how the algorithm works to decide which shares to take at that price. Any ideas?
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Ken, why are you deciding to bail? Im only recently got interested and am digging in long term gambling only that it is a viable company come 2026.
 
Mulligan said:
Ken, why are you deciding to bail? Im only recently got interested and am digging in long term gambling only that it is a viable company come 2026.
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Mully, no alarm bells here, just trying to flip in between divies. The spread is sometimes $0.30, which is nearly a quarters worth of pennies. I've been pretty lucky doing this recently with NYCB-U where the spread is sometimes $0.50. It amazes me that there are still people out there that put in market orders for these low volume issues.
 
brokrken said:
Mully, no alarm bells here, just trying to flip in between divies. The spread is sometimes $0.30, which is nearly a quarters worth of pennies. I've been pretty lucky doing this recently with NYCB-U where the spread is sometimes $0.50. It amazes me that there are still people out there that put in market orders for these low volume issues.
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Ok, I see.. Guilty as charged here also...In fact I dumped all my NYCB-U when it went over $49 what last week?
I have been churning and churning on 25-50 cent movements. Though with U it was more like $4 as I have held it for a while.
I hate to say it, but junk is where its at for most of my constant flips.
I dumped about 1500 shares of PPX today (this one of course isnt junk) at 25.73. I bought most in 25.20s just a couple weeks ago. Im gonna have to redo my spreadsheet as the cast of characters have changed a lot last couple days.
They are all in my 75 or so tracking preferreds but I usually only own 25-30 at any given time.
 
Are there any complications in taxes caused by owning SPLP-A in a Regular account ?

I know it's not got the special 15% rate, but mostly concerned about something (ex K-1 paperwork - whatever that is about) , not worried about treating it as regular interest.
 
Sunset said:
Are there any complications in taxes caused by owning SPLP-A in a Regular account ?

I know it's not got the special 15% rate, but mostly concerned about something (ex K-1 paperwork - whatever that is about) , not worried about treating it as regular interest.
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From Quantum:
QUANTUMONLINE.COM SECURITY DESCRIPTION: Steel Partners Holdings L.P., 6.00% Series A Cumulative Preferred Units, liquidation preference $25 per unit, redeemable at the issuer's option at anytime at $25 per unit plus accrued and unpaid dividends, and with no stated maturity. Cumulative distributions of 6.00% per annum ($1.50 per annum or $0.3750 per quarter) will be paid quarterly on 3/15, 6/15, 9/15 & 12/15 to holders of record on the record date that will be 3/1, 6/1, 9/1 & 12/1 respectively (NOTE: the ex-dividend date is at least one business days prior to the record date). Holders of the preferred units will have the right to require the issuer to repurchase up to 525,000 preferred units (optional redemption amount) on the third (3rd) anniversary of the original issuance date of units (the optional redemption date) at a redemption price of $25.00 per unit plus accumulated and unpaid distributions in cash (see prospectus for further information. If not earlier redeemed, on the date that is the ninth (9th) anniversary of the original issuance date of the units, the issuer shall redeem all of the units at a redemption price equal to $25.00 per unit plus an amount equal to accumulated and unpaid distributions (see prospectus for further details). Holders of the Preferred Units will receive specific tax information from the company, including a Schedule K-1 which generally would be expected to provide a single income item equal to the preferred return (see page 29 of the prospectus for details). This security was not rated by Moody’s or S&P at the time of its IPO. In regard to the payment of dividends and upon liquidation, the preferred shares rank junior to the company's senior debt, equally with other preferreds of the company, and senior to the common shares of the company. See the IPO prospectus for further information on the preferred stock by clicking on the ‘Link to IPO Prospectus’ provided below.
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I had read the Quantumonline statement, but here is my issue:
I have some SPLP-A in an IRA/ROTH, so I can due to the small amount, ignore the tax treatment of partnership and other tax treatments.

That might not be the same in a regular account, if someone tells me they have some similar stock in a regular account and it causes a lot of paperwork I'll skip buying it in a regular account.

Maybe I'm worried about nothing, but I don't want to spend 2 extra hours on taxes when I can just buy a different stock.
 
capjak said:
Fidelity Alert that AILLL is part of a Full Call......

Not happy........
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Im not seeing that anywhere, are you certain? I dont own AILLL, but I own several other sisters and I have no notifications on them. SEC filings and their website have no mention. The coming dividend was declared a while back.
 
Sunset said:
Are there any complications in taxes caused by owning SPLP-A in a Regular account ?

I know it's not got the special 15% rate, but mostly concerned about something (ex K-1 paperwork - whatever that is about) , not worried about treating it as regular interest.
Click to expand...



This is supposed to be a one line income only filing so it shouldnt be onerous like a common stock K-1 traditionally is.
 
I own several of the Ameren Preferreds. I, too cannot find anything.


Hope that Fidelity is wrong. Just have to wait and see.
 
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