Post by
primo105 on Mar 31, 2023 1:02pm
Some quick math
Possibly this explains the discount on the prefs..no idea why the commons are where they are:
Current annual dividend is $0.77496 per share. Based on Nov 30, 2022 shares o/s 52,281,187 results in total cash outlay of $40,515,828. In F2022 the fund only received $22,637,150 in dividends from its investments.
To receive $40M in dividends the yield on its investments must be 5.55% (based on the FMV $720M at Nov 30, 2022). Some of the CAD banks pay this yield, but the US banks are not close.
Therefore, this could explain the discount on the prefs as the dividend payments are eating away at the NAV. However, this reasoning should result in the commons trading at a discount as well - so with those, I am perplexed.
Comment by
EdPaquette on Mar 31, 2023 2:06pm
They get some income from selling covered calls. The nav of the Preferreds are 10 until unit nav falls to 10, wiping out common shares completely. Probably going to consolidate like the did with FTN. I have never redeemed so far.
Comment by
Splitfunding on Mar 31, 2023 3:44pm
But consolidation can only happen at the termination date though correct? Which for FFN is in Dec 2024, so not for another year and half - a lot can change between now and then.
Comment by
mouserman on Mar 31, 2023 6:26pm
I believe you are right, last consolidation on FFN happened on DEC 30 2019.... FFN preferreds were only receiving 4.583 cents per share at that time. It has since risen to 6.458 per share , an increase of over 40% in yield.