RE: In my opinion!Kitty:
Going to disagree with you there. I think they want to keep knocking off the preferred shares.
If they can knock off the series 1 for 60% of what they'll have to pay in Dec 2012, I think it's a better deal. There is also a similar (though slightly lower) reduction in annual dividends. I realize they can convert the series 1 into commons next March if commons are still under 2 bucks at that time. However, I don't think they'll do that because it would piss off key shareholders and they can achieve the same thing with buy backs. Same, to a lesser extent (because retraction date is further away) would go for series 2. When you get through a pile of those, then maybe start into the commons while they remain cheap. Between the commons and the 3 and 5 series, it seems like a bit of a toss up to me.
I think they want to get the most bang for their buck buying back paper and right now, I think that's the series 1 & 2 prefs. With enough of those bought back, the debt picture starts to look quite a bit better and specter of converting the series 1 to commons is removed. This in turn should drive some external investment in the commons which look very attractive once the debt profile starts to look less scary. Buying back piles of series 1 also removes any perceived $2 trading cap on the commons -- right now, some may feel these is incentive to keep the commons under $2 though because the series 1 can only be converted to commons if the commons stay under $2.
Eventually some of the commons do need to be bought back and, the cheaper the better obviously. They just don't seem like the top priority. It's quite a balancing act though when you think about it.
Mark