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AMERCO Message Board

  • flipper_58 flipper_58 Apr 25, 2004 5:48 PM Flag

    How a sleep the rating agencies are

    Take a look at what the rating agencies put AO pref A in the same category as. I know these other firms and there is not a chance in hell any of the other firms will even pay. It's really remarkble and certainly explains the very high yield AO pref A, when including the back dividends. Oh well, makes no difference to me. But thought some would be interested. It just goes to show you how inportant your own DD is to making money in the stock market.


    67104Q205 O'Sullivan Industries Holdings Inc., 12% Senior Preferred Stock PKSHT
    Chart 11/22/99
    12.0%
    n.a. $1.50
    $1.50 Now
    11/30/2011 C / B
    2/16/04 Prospectus Suspended!
    6/30 & 12/31
    AO-A
    023586209 AMERCO, 8 1/2% Series A Cumulative Preferred Stock NYSE
    Chart 10/14/93
    8.5%
    $2.125 $25.00
    $25.00 12/01/2000
    None C / D
    10/26/03 IPO before EDGAR
    No Prospectus 3/1, 6/1, 9/1 & 12/1
    PGOAP
    69335C104 PGS Trust I, 9.625% Trust Preferred Securities PKSHT
    Chart 6/22/99
    9.625%
    $2.40625 $25.00
    $25.00 6/30/2004
    6/30/2039 C / NF
    2/16/04 Y Foreign Co.
    No Prospectus Suspended!
    3/31, 6/30, 9/30 & 12/31
    FWLRP
    302684204 FW Preferred Capital Trust I, 9.00% Preferred Securities Ser I OTCBB
    Chart 1/11/99
    9.0%
    $2.25 $25.00
    $25.00 1/15/2004
    1/15/2029 C / CCC-
    11/02/03 Prospectus Suspended!
    1/15, 4/15, 7/15 & 10/15
    WHX-
    929248201 WHX Corp., $3.25 Series A Convertible Preferred Stock NYSE
    Chart 7/01/93
    6.5%
    $3.25 $50.00
    $50.00 7/01/2003
    None C / B-
    2/26/04 C IPO before EDGAR
    No Prospectus Suspended!
    1/1, 4/1, 7/1 & 10/1

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    • Calpine does have 3 High Tides coming due in the next year with one ($275m)in November. I'm still trying to figure out this complicated "remarketing" crap but if converted into debt it could blow a few of their covenants out. So you have that remarketing risk shortly ahead. Still doing DD and I'll let you know what I find out. The common seems much more at risk.

    • I guess I haven't looked at it too closely, but SRP paper vs NVP paper -- I'm not sure there is much of a difference. On some days, the NVP paper could be better. But, on other days the SRP paper. Both are weak but not dead...Sierra Pacific has value, Nevada Power has value, SRP, Inc. could be better or worse.

    • I read more on the CPN High Tides reset. It might make a short there make sense against a long position on the bonds. The convert price was something like $58 on these $50 trust preferrd.

    • Becareful of NVP and who owns the junior sub in the NVP trust. I'm dealing with Northwestern and Mont. Power, Magten Mangement has suit saying the junior subs(in the trust preferreds), are not pari-passu with he other trusts but I think their case will fail. In the end IMHO the parent assumes the grantors trust(which holds the bonds from NVP originally) and the bonds within. Only usually the secured debt has any direct claim and is protected from the merger I am finding. So my opinion would be you own SRP paper not NVP paper. But I assume maybe you're aware of that. Just a thought.

    • First, Calpine has no maturities until something like 2007, so you have at least 2 to 2 1/2 years of payments before they roll over dead. 2nd, my guess is that if it goes, I'm not going to get much of anything. I'm not sure that the short would help, and I think it's too early to short it because they have too much liquidity to die quickly.

      I just think that Calpine is going to make it through. Power consumption keeps going up, someone is going to have to buy their output soon or start building more new plants.

      (Then again, those hotels have been suffering for quite some time -- so, maybe it will take a bit longer than we all think.)

    • Your upside here is only getting it back up to par. And, yes, at 7.75% face value, it's not a high yielder. Nevada Power; however, does not worry me at all. Nevada needs a power company and they have already taken it out for it's whipping. I think it will be back up there, but you could be very right -- rates going up will mitigate the increase in credit quality. Clearly not a home run, but I'm nearly 100% certain that Nevada Power (and Sierra Pacific) will do just fine so what I see is mainly just interest rate risk.

    • Holy crap...read this Calpine trust preferred prospectus: http://www.sec.gov/Archives/edgar/data/1096327/0000891618-99-004774.txt

      How in the World do they EVEN get crap like this sold!!! Unreal.

    • Here's an interesting thought on Calpine.

      The 8.625% of 2010 are trading at $710. The Calpine Capital Trust 5.75% is trading at $48. Buy the bonds and short the Capital Trust. This turst has a reset on the common coming up in December and I would need to look at the terms there. I wouldn't think you'd need a "perfect hedge" just enough Calpine Trust to spread the risk. The bonds in that Trust are VERY subordinated.

      A look at Northwestern BK plan of recovery should be an eye opener for all trust preferred buyers. The senior unsecureds are getting 69% recovery and the junior sub (in the trust preferred) are getting 2%!! How's THAT for a step down!!

    • ALarriva, how much up side is in NVP-B? The yield is 8.10% now. It's a trust preferred so the dividends are taxed full rate too. SRP looks like it's going thru a major restructuring so I assume it's heading to be a better credit. but with rates heading higher I wonder if that will offset a credit increase at that relatively lower yield. PCG_U yields 6.7% but has a qualified dividend. So I can't think NVP_B could trade much better then a 7.5%? Am I missing something?

    • Here's a few other stories I'm following closely anyway. Some with degrees of short common against it. Foster Wheeler (preferred), Lodigan(common), WHX(preferred), Archon(preferred), CMM(common), OCQ(preferred). Highly speculative, certainly, but a common short takes a lot of risk out. Some just the common at the right time.

      I find the preferred trade closer to the common and reward for recovery is greater then the bonds. So they seem easier to hedge and the hedge is closer. The only real difference is the dilution risk you're playing which I feel rarely is discounted enough.

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