Financial 15 Split Corp T.FTN

Zero sum game

[navgod]

What I mean here is that inside the unit NAV of FTN what is good for FTN.pr.a is bad for FTN. This increase in the distribution should add at least 20 cents in value to the prefs and a similar drop for FTN. For those of us on this board holding the prefs as a trade into the retraction this is like adding a cherry on top of the sundae -- for those in the cap shares not so much. Disclosure I own 80.4K FTN.pr.a and 161.6K FFN.pr.a no brag just a fact GLTA

[primo105]

Those are nice positions navgod.  As you have a large position what do you see as the largest risks to these preferred shares?  I don't see much, but does anyone know why the FTU.pr.b has trended downwards the last couple years?

[navgod]

Good question -- Basically the largest and only risk is significant drop in large US/CDN banks of 25%+ over the next year for FFN.pr.a and 40%+ for FTN over the next two years. Now the real question is what would cause that to happen? After the events of the last four years God only knows and he is not to sure. Another reason why I am happy to be short high premium bank splits when available. As

[primo105]

Thanks, in this scenario (a large drop in banks), over time I suspect the drop would be temporary and the banks would march higher after the sell off.  Is there a chance those significant losses would crystallie in FTN/FFN prefs?  My thoughts are that the fund will just hold the shares through the downturn and ride them back up.

[navgod]

My worse case involves the banks falling enough to drop through the $10 level at or before the extension date. That would hurt my expected return on the prefs and would a complete disaster for the cap shares.

[navgod]

Putting my money where my mouth is--starting a small short position in FTN to test the water. Would rather be shorting BK but can't borrow any. GLTA

[ANALOG GUY]

  gotta give you props preferreds up .22  today :)  

[navgod]

Thanks let 4k go at 9.83

[ANALOG GUY]

My 20k pales compared to a God .... lol i will be keeping mine and collecting that sweet dividend for a LONG time  how much of the dividend is "tax credit eligible " if you know  tia

[AXPRO]

Take a look at the Common share document details for 2022, likely 2023 will be comparable, you can find it on the Quadravest website for FTN.  I will add a screenshot below. It shows that the monthly dividend is composed of 2 amounts, 1 for Eligble dividend the majority and 1 for Capital gains dividends. This latter one requires some deeper understanding of 'Corporations investing money&

[AXPRO]

Trying to include a screenshot

[ANALOG GUY]

Axpro , thank you for the awesome response  Much appreciated