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No. of Recommendations: 6
QTS-B looks attractive. I love convertible preferreds, because they are not callable and some have a realistic chance to appreciate with the commmon. This one looks like it fits in that category-- fast growing issuer, conversion value only about 15% below market price. Am I looking at this right?

What bothers me is that at $110.21 (today's closing price) QTS-B is trading at a premium both to the liquidation value of $100 and to the conversion value of $97.03 (2.1264 shares of QTS common, which closed at $45.63 today). At $110.21, with a coupon of 6.5%, the effective yield is 5.90%, while their Preferred A, which has a coupon of 7.125%, closed at $25.65, which provides an effective yield of 6.94% Since QTS-B has parity with the QTS A stock, that means that you are paying a premium of over 1% in yield for the conversion feature. Seems overpriced to me.

Lots of folks on this board have had a good ride on ARE-D. But it's now eligible for forced conversion (eligible for, but not yet subject to)

How so? The conversion price for a forced conversion of ARE-D is that the common closes at 150% of $100.93, or $151.40, for 20 out of 30 trading days. The 52 week range for ARE common tops out a $144.46, or $6.94 short of the price to force a conversion. And that was a peak on a single day, not the closing price, much less the closing price for multiple days. Holders of ARE-D should be watching to see when it may become eligible to be converted, but at this point, it's not.

AJ
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