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Corrections Corporation of America Message Board

  • flipper_58 flipper_58 Apr 18, 2000 4:08 PM Flag

    What your Special Div. might be.

    PZn will be issuing a Payment in Kind (PIK)
    preferred with a 12% coupon instead of cash for their
    special dividend. Here's why this preferred won't be
    around long and those that fail to convert will pay a
    price. First PZN's Pref. A yields 20% so getting 12% is
    no bargin. The pref. will convert into common shares
    on 2 dates, the important issue to watch will be
    PZN's pref. A since the C will trade relative to it.


    THis looks to be set up very much like CMM's (A
    mortage REIT)taxable dividend. Here's CMM's explanation
    of their preferred F:
    ROCKVILLE, MD, September
    15, 1999 � (NYSE:CMM) � The board of directors of
    CRIIMI MAE Inc. yesterday, September 14, 1999, declared
    a dividend for common shareholders of record as of
    October 20, 1999. The dividend will be payable on
    November 5, 1999 in up to an aggregate of 1.61 million
    shares of a new series of $10 Face Value Series F
    Redeemable Cumulative Dividend Preferred Stock (the �Series
    F Dividend Preferred Stock�) (NYSE: CMM-PrF). The
    distribution is designed to satisfy the Company�s remaining
    federal income tax obligation for the 1998 tax
    year.

    Holders of record of each share of CRIIMI MAE common
    stock will be entitled to receive 3/100ths of a share
    of the new Series F Dividend Preferred Stock (i.e.,
    three shares of Series F Dividend Preferred Stock for
    every 100 shares of common stock held). Series F
    Dividend Preferred Stock will be issued in whole shares,
    with shareholders receiving cash from a transfer agent
    for their fractional share interests at a price equal
    to the average sales price of all aggregated
    fractional shares sold by the transfer agent, less
    transaction costs. The Series F Dividend Preferred Stock will
    be convertible into shares of common stock during
    two, 10-business day windows: the first commencing on
    November 15, 1999, and the second commencing on January
    21, 2000. Conversions will be based on the
    volume-weighted average of the sale prices of the common stock
    for the 10-trading days prior to the date converted,
    subject to a floor of 50% of the volume-weighted average
    of the sale prices of the common stock on November
    5, 1999. At the end of the second conversion period,
    February 4, 2000, all conversion rights of Series F
    Dividend Preferred stockholders will expire.

    The
    Series F Dividend Preferred Stock provides for cash
    dividends at an annual fixed rate of 12%. The first
    dividend will be paid no earlier than the end of the
    calendar quarter in which the Company�s anticipated plan
    of reorganization becomes effective, and no more
    than quarterly thereafter. Series F Dividend Preferred
    Stock is redeemable at the Company�s option after
    November 5, 2000 at a price of $10.00 per preferred share
    plus accrued dividends

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • I am no longer in PZN. I initially had the old
      CCA when it was a killer growth company and doing
      well UNTIL Doc and Co. decided to screw it up.I SHOULD
      HAVE gotten out immediately but I rode the stupid
      thing down to the high teens and then bailed..This co.
      is a mess..I'll only say that if you are hanging in
      there for 1 point..as soon as go get it (IF you get it)
      I would cash out and get the heck out of
      Dodge.....this is not a stable company anymore nor has it been
      one for quite some time..PROCEED WITH EXTREME
      CAUTION!!!! I wish you all the luck..Best Regards Angel Kitty

    • but, I hope you placed a stop loss at around 2 1/2.

    • 37.50 would be nice to see,, is that what
      your
      were in for ? I Just Picked up 5000 shares for $3.00
      last Thursday,,, Hope I didn't screw
      up too BAD...
      Waiting for a One Point Jump..
      Are You Still In PZN
      NOW ???????/
      Any Advise Would be Appreciated.....

    • your question..If you check back thru the posts
      of the last couple of years..you will see me asking
      the same question..the only difference is that the
      amount in my question was "Will it ever get back to
      37.50?"..so in a way I guess one question answers another
      one.....only don't wait until you have a 50%loss like I
      did..........

    • Anyone Think This PZN Will Get Back To $4.00
      Soon???????????

      LW

    • Thanks! I was confusing pref.B and pref.C.

      Appreciate your explanation.

    • The closing tick was 100 shares on the Pacific
      Stock exchange at $3 1/8. At 20 mintues to 4:00 there
      was an order imbalance for an order at the close of
      136,000 shares. The closing tick on the NYSE was 150,000
      at $2 15/16.

    • No one has commented on the late very large purchase today that pushed PZN back over $3. Someone seems to really like this thing at about $3.

    • If I remember the pref. B will ONLY be offered to
      PL in place of common shares:
      ""shares of Prison
      Realty's common stock are
      unsubscribed by the common
      stockholders in the rights offering, Pacific
      Life will
      purchase shares of Prison Realty's Series B Preferred
      Stock
      equal to the difference between $200.0 million
      and the gross proceeds
      received by Prison Realty
      in the rights offering. The Series B
      Preferred
      Stock will provide for cash dividends at a rate of 6%
      per
      annum and a PIK dividend at a rate of 4% per
      annum for the first
      three years following the date
      of issuance, and cash dividends at a
      rate of 10%
      per annum thereafter, payable quarterly in arrears.
      The
      Series B Preferred Stock will rank on a pari
      passu basis with shares of
      Prison Realty's existing
      Series A Preferred Stock. The Series B
      Preferred
      Stock will be convertible into Prison Realty's common
      stock
      at a conversion price equal to the rights
      offering exercise price"" Their pref. is a more "normal"
      convertible pref than our pref. C. The differences are the
      conversion windows versus an implied value that regular
      convt. pref.'s carry because of the fixed common price.
      I'd much rather have their pref. than our pref. C.
      But as I have felt, the pref. C is a temp. piece of
      paper to fulfill the IRS rules to be a REIT, any one
      who doesn't convert will be holding a piece of paper
      that's worth 25-30% less the day after the conversion
      window is done.. I think there is an issue to be raised
      on the implied value of the pref.C's value in place
      of a cash dividend, there is NO WAY this pref. would
      trade equal to cash value without the conversion
      opportunity. The pref.A yields 18% and pays cash the pref. C
      is a PIK. A 12% coupon is not a fair value IMO and
      could be argued that this PIK pref. does not represent
      $150mm. Unlike PL's convertible pref., with NO premium to
      the converion price and cash and PIK could be argued
      that fully represent a fair value for the cash they
      are putting in. But that's another story.

      An
      oversubscription priv. allows each record date shareholder to buy
      5 times more shares at the discount price if they
      choose. IMO, if PL wanted to end up with alot of the
      pref. B from unsubscribed shares they would not allow
      an oversubscription component. Given their exposure
      I understnad why. They will certainly own a lot as
      it is.

    • Hate to be dense buttttt:

      It may be an
      expensive insurance policy, but the shareholders don't have
      much choice. Therefore, I suspect shareholder approval
      is a lock.

      Got the concurrency of the
      approval period and the rights offering closing
      together.

      Confused about your last sentence, "PL would never allow
      an over-subscription priv if the really wanted to
      buy a lot of the pref.B". Since the pref.B is
      virtually a forced conversion to common (at least in my
      view), then why would exercising rights and
      over-subscription be in our best interest. I may be slow, but my
      course of action is staring to become much
      clearer.

      Thanks to all for your help!

    • View More Messages
 
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