Tweak, Tweak, Tweak

June 20, 2014  8:25 am

We have made a number of adjustments in the model this week which are consistent with trying to shorten maturities while not hurting our income by a bunch.

We have sold 2 preferred issues.  We sold Boston Private Bancorp 6.95% preferred (ticker:BPFHP) as we had a good gain and the current yield was just under 7%.  We also sold Retail Properties of America 7% preferred (ticker:RPAI-A) because we had a really nice gain and the yield had fallen under 7%.  Both issues sold were to capture gains on issues that were ‘perpetual’ in maturity, had large gains and the yield had fallen a bit under where we would like to be at on a current yield basis.

We purchased the Capitala Finance Group 7.125% preferred (ticker:CLA).  While the current yield is just a bit better than the issues sold it is a ‘term preferred’ with a maturity date in 2021.  Buying this issue fulfills our direction to shorten maturities.

Update on Ladenburg Thalman Financial Preferred

An update on this issue is in order.  We had written that we were buying more and hoped for a nice capital gain on the issue as it appeared to be undervalued.  We had noted the hazard was that after the 3,000,000 share ‘at the market’ authority was used up in June that they could move for more authority to sell more shares ‘at the market’. Unfortunately for those, like us, looking for a capital gain the company has negotiated to sell 3,000,000 MORE shares ‘at the market’.  This kind of pisses us off–but it is the way it is.  We believe that chances of capital gains anytime soon are gone.  We will decide if we should sell 1/2 our position as we are overweighted in the issue.

Here is the new info.