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PNM Resources, Inc. Message Board

  • hdilly hdilly Mar 18, 2008 1:14 PM Flag

    PNM Preferred Dividend

    Having violated my usual approach of having stop loss orders in on most of my positions, I have ridden PNM and PNM pfA down to the present miserably low levels. Recognizing that the dividend on the common can and probably will be cut, does anyone have any insight on how bad tings have to get before the preferred dividend is suspended?

    My understanding is that the dividend cannot be cut, but can be suspended in certain circumstances. PNM's earnings are not great, but at least there are earnings. Yet, the preferred dividend at 18.2% seems unsusstainable.

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    • I looked at the Balance sheet and there is no indication of Preferred stock. Do you have a symbol for pnm preferred stock????

    • where is the preferred stock traded and under what name? is it cumulative preferred? what is the symbol as Yahoo doesn't show it under pnw. At 18%yield, if it is cumulative preferred, it is a buy and hold.

      Good investing.

      • 1 Reply to desk_pounder_2007
      • SECURITY DESCRIPTION: PNM Resources, 6.75% Equity Units, stated amount $50 per unit, initially consisting of Corporate Units which include a stock purchase contract and 1/20 of a 4.80% senior note with a principal amount of $1000. The stock purchase contract requires the holder to purchase for $50 a variable number of shares of PNM Resources Inc. (NYSE: PNM) common stock no later than 5/16/2008 and pays a contract adjustment rate of 1.95% per annum. The stock purchase settlement rate will be 1.5315 shares per unit if the then current market price is equal to or greater than $32.65 and 1.8685 shares per unit if the market price is equal to or less than $26.76. For market prices between those values the settlement rate will be $50 divided by the market value. Prior to the IPO of this security, the last reported sale price of the common stock on 3/23/2005 was $26.76 per share. The senior note is due 5/16/2010 and is subject to reset and remarketing on the fifth, fourth or third business day prior to 5/16/2008. The Corporate Units pay quarterly distributions of 6.75% ($3.375) per annum on 2/16, 5/16, 8/16 & 11/16 to holders of record on the first day of the month in which the payment is due. The senior notes are pledged as collateral to secure the holder's obligations under the stock purchase contract. The holder has the right at any time to convert the Corporate Units to Treasury Units by the substitution of a specified zero-coupon U.S. Treasury security for the senior notes and to later recreate Corporate Units. The equity units are unsecured and rank equally with the company's other unsecured senior indebtedness. See the IPO prospectus for extensive additional information on the equity units and their mandatory conversion provisions by clicking on the ‘Link to IPO Prospectus’ provided below.

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