Financial 15 Split Corp T.FTN

FTN unit nav to OCt. 28 =$22.24 after distributions

[mouserman]

So after the 12.5 cent distribution to commons and  and 5.6 cent to preferreds, the UNIT NAV now stands at $22.24.
FTN last trade at $11.64  leaves the commons trading at a 60 cent discount to NAV even after the distributions are taken for the month. Discount is almost exactly 5%...

[navgod]

Given the last trade for the pref was 10.74 the combined unit market price is 22.38 so trading at a small premium of 2/3 of a percent on a unit basis.

[mouserman]

Next week quadravest will report the UNIT nav and the NAV for commons in the monthend update. AND 10$ will be attributed to preferred shares and the Stated NAV for commons will be the UNIT NAV - the 10$..... That is what i base discount or premium on.

[pjn0987654321]

I didn't see why the $10.74 is significant for the preferreds when the redemption value is $10.   I think you are right to use $10 in the calculation of discount or premium, not $10.74.  

[EdPaquette]

I'm surprised the preferreds are at 10.74.  FFN preferreds pay a higher yeild than FTN preferreds. 

[navgod]

They both pay 6.75% -- FTN is the safer pref with its higher unit NAV. That said I own FFN.pr.a as it is better value at current prices. My surprise is not FTN pref at 10.70 but FFN pref at 10.10. GLTA

[slst]

FTN Pref shares have $12 + of safety coverage (NAV of A shares.)  120% While FFN Pref shares have $7+ of safety coverage (NAV of A Shares)  70% Both were stuck offering overly generous rate of 6.75% for at least 5 years as part of a reorganization when trouble hit.

[navgod]

Small correction: Pref rate on both issues can be adjusted annually. I was surprised that FTN.pr.a coupon was not reduced this fall to 5.5%.