I know some folks are always on the lookout for new preferred opportunities.I had previously looked into shipping company TOO preferreds when they were significantly below par, but had gotten rescued by an investment firm. Thus shoring up the company's financials and ensuring liquidity.While there is still some risk in this company, it's no where near what it once was. I thought it might be of interest to those looking for income. It's first call date is 2/15/2025 and it's paying 8.875% and is priced a little below par at 24.58.Here's the Quantumonline specifics of the E issue: eekay Offshore Partners, 8.875% Series E Fixed/Float Cumul Red Perp Prfd Unitshttp://www.quantumonline.com/search.cfm?tickersymbol=TOO-E&a...Good Luck To All!-srockazNo TOO positions of any kind
Not worth the risks in my opinion.
Kingran-Care to elaborate. I'm interested in the metrics you use to form this opinion...not poking you at all!
There is a reason it is yielding 9%. The debt is 3 times the equity. The shares are trading at $2. They cannot raise equity or debt.This is a classic case of chasing yield. There are lot of solid REIT's dividend yield is above 7.5%, say for ex Kimco's dividend yield is 7.5%.The additional yield vs additional risk is not worth it.
Let me tell you about why the risk always doesn't pay. I had a small position in SVXY, it is a volatility ETF. It was gaining like a clockwork. From $120, it crashed to $11.38. Of course, no one expected volatility to shoot like this or the fund to crash like this, but the bigger point is, sometime the risk you assume for the additional benefit are not commensurate.It was a 1% position, I had close to 100% gain, but now, I have lost 100%.I think our understanding of risk is immature. Our ability to react to changing environment is not nimble enough. In the past, at the slightest sign of trouble I sold and waited in the sidelines. This time, I got complacent and lost all of my investment.It is an important lesson for anyone who thinks they can trade in and out of risky positions.
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