RE:RE:RE:RE:FFN share consolidation
Consolidating the prefs will not happen... they are appropriately priced.
The fund is built around the preferred shares. The Prefs are the anchor to the fund. They have a fixed par value, and a fixed dividend rate currently 7%. The dividend accumulates if the preferred share dividend is not fully paid. Upon retraction, the Prefs would only get their $10 back. When the fund reports share numbers, it is the preferred share count they report on.
It is the Class A shares that assumes ALL the risk as a result of the leverage. That is why they can earn either 0 or 30% of their trading price. Through the ATM program, the fund has the ability to sell either Prefs or A's at market, into the market. Prefs, no problem. FFN can sell a $10 par value Pref at $10.55 making for an immediate gain. The A's, no so easy. A's are trading at $7.50 or less where the book value (NAV) is over $8. THAT would hurt the NAV.
The A's should be trading at least the book value (NAV), BUT they are not. Add 10% more shares, then the A's will have close to the NAV.
mNm