Yoda mentioned PLD preferreds in the prior thread and I'm wondering which one(s) I would want to own. All go ex-div on 3/18. As Yoda mentioned the volumes on these are very low and market prices may vary greatly from last trade. Numbers are based on last trade.

There are 6 callable preferreds:
PLD-O $1.75/year $25.50 yields 6.86%
PLD-P $1.712/year $25.17 yields 6.80%
PLD-M (R and S) $1.6875/year $25.23-$25.28 yields ~6.68%
PLD-L $1.625 $25.05 yields 6.49%. (Noticed that bid is $25.09).

Seems to me that I'd rather own "P" rather than "O" as PLD would likely call the "O" shares first. Also, the "O" shares trade at a $.24 premium to par plus accrued dividend and "P" trades at $.09 discount to par plus accrued dividends. This $.33 difference is 8 years of dividend differential. The long term return of the "P" shares are better than the "O". JMVHO.

PLD-M(R an S) trade very close to par, have two other preferreds that PLD would call before them and still yield 6.68%. Certainly not bad for the widows and orphan accounts.

PLD-L. Yields 6.49% and is trading at a $.20 discount to par plus accrued dividends. Likely last one to be called by PLD.

OK, time to choose.
I'm choosing the "P" shares.

Thanks to all that play along.
John

	PLD-O. I'll take the highest yielder and risk the call loss.
	PLD-P. Better yield to expected call than "O". 6.8% pretty desirable.
	PLD-M (R or S). 6.68% Nice balance between yield and call risk.
	PLD-L. 6.49% trading at slight discount. Great call protection.
	I PLD in my pants.

Click here to see results so far.

I assume you realize PLD is planning to call all of the above this year. Therefore I will not buy anything for a price more than accrued dividend + 30 days. In case of a call, I will lose only the opportunity to earn income but my capital will be protected.

Also, PLD issues trade very thinly even for REIT pfd's. something to keep in mind.

I'll take PLDGP, and get about a 5.8% yield to maturity and have no call risk for 13 years.

CM001 wrote I assume you realize PLD is planning to call all of the above this year. Therefore I will not buy anything for a price more than accrued dividend + 30 days. In case of a call, I will lose only the opportunity to earn income but my capital will be protected.

CM001, How do you know that PLD plans to call their preferred shares this year. I have been all over the PLD website and not found that information. Did I miss something?

I am a happy owner of PLD-P (bought when the shares were AMB) and think the chances of them never being called is large enough to worry about. Well maybe it is not a worry today, I can see that changing over the next two or three years.

Stats

Stat5guy said: CM001, How do you know that PLD plans to call their preferred shares this year. I have been all over the PLD website and not found that information. Did I miss something?

Stat5, this was widely discussed on the PLD Q4 2/6/13 earnings conference call:

The -- one more piece would be the preferreds, as you mentioned. We can redeem all but one series of our preferreds. That's just under about $0.5 billion. And then the balance of that, to finish it out, would be on our line. So when you look at the blended yield on all of that activity, on all of that reduction of leverage, that's about 4.2%

So it is pretty clear cut that they plan to redeem all of their callable preferreds. They did not give a firm date, so we are left to guess when that might be. The safest thing is to always assume it is 30 days from today. I think they have to give investors 30 day notice. I agree with Jim and own the PLDGP which has a first call date of 11/13/2026.


Thanks,

Yodaorange

Yoda, thanks. Now I feel silly. I read all the documents on the PLD website but did not listen to the conference call.

Not sure what I will do with the proceeds. I have considered PLDGP several times but have never bought it. I am mostly concerned with the fixed dividend over the long term (that is, I am afraid of inflation). At a 5.8% yield, I feel I can buy a utility or REIT that will grow its dividend over time.

Thanks again.
Stats

Stats said: Yoda, thanks. Now I feel silly. I read all the documents on the PLD website but did not listen to the conference call.

Stats, I should have given REITnut credit. He had listened to the PLD conference call and mentioned the preferreds being called on a post last week. I did not listen to the call, so I only knew about it because he picked up on it.

Thanks,

Yoda

I don't know where I got that 5.8% yield. Currently, PLDGP is yielding almost 6.7%... that would make me more comfortable owning it.

Stats

I'll take PLDGP, and get about a 5.8% yield to maturity and have no call risk for 13 years.

Agree, Jim, if you can buy this one. This one is thinner than one of those chicken-legged fashion models who strut the runways in Milan.

R.

I don't know where I got that 5.8% yield. Currently, PLDGP is yielding almost 6.7%... that would make me more comfortable owning it.

Jim and Yoda were no doubt referring to the yield to first call, which is always lower than current yield when a bond or pfd is trading at a premium over par value. With so many of these trading over par these days, we really need to look at yields to first call. I think there are probably a few threads on our board that discuss this.

Whether to go with a quality REIT pfd with a YTFC below 6% or a utility with a lower yield but with some modest growth prospects is a Big Issue for many of us these days. There are also some pretty good REITs with current yields of over 4% that may provide better total returns, over time, than REIT pfds with YTFCs in the high 5s. But, of course, they have different risk/reward profiles. As my Dad used to say, "Pick your poison."

Ralph

Yes, 5.8% is adjusting for built-in capital loss due to it being over par -- only in the case of PLDGP it is yield to maturity, not to first call. This issue is not callable. It matures and pays on a date certain, like a bond.