Regarding the proposed note/convertible offiering. 1.50% interest and conversion just over $17 seems confusing. Why not simply purchase on of the existing preferred series -paying better than 8%- and buy a long call at $15+... the 2014 series calls are now under 30 cents... so for five years I collect 8%+ at a cost of under 50 or 60 cents.... cash flow looks much better to me... what am I missing?????? What I do like about the offering is that SFI-preferred dividends will continue to be return-of-capital for the next few years.
It's true, but the conversion option is a lot longer with the new notes. If you pay 30 cents fro calls every 6 months for 3 years, you're paying $1.80...plus there's no guarantee the calls won't increase in price. And I assume there's call protection (though at 1.5% it doesn't seem like there'll be any calling). If they were priced at par, though, it's still a little bit of a head scratcher.